Term Limits for Executive Directors

Lots of people talk about term limits for board members, and even the President of the United States is limited to eight years of service, but no one seems to consider term limits for Executive Directors of nonprofit organizations.

Let’s face it – once you have decided that this is the job from which you will retire, there is a natural tendency to make sure that the boat never rocks. Consciously or unconsciously, one tends to play it safe in order to survive. Entrenched EDs are less likely to initiate change, more likely to build a board that is also averse to change and, ultimately, keep an organization from meeting the evolving needs of it constituents.

This is an issue fraught with many exceptions and many examples of decades-long exemplary leadership. However, there are also many examples of entrenched E.D.s who keep an organization in a holding pattern, are averse to risk and confuse organizational stability with safety and self-interest. Founder’s Syndrome does not just apply to founders.

I’m not suggesting that EDs, particularly good ones, get shoved out the door every seven years or so without a safety net. (I think seven to ten years is a good length of time to do anything!) There are many options for honoring an ED’s contribution and helping her/him on to what’s next.

The board can pay his/her salary for a year at another institution or for-profit firm where they can acquire additional experience and skill sets, pay for a year of advanced education, or simply fund a year of recuperative leave. A funder, or group of funders, can contribute to the separation package, hire the E.D. for a year as a consultant, or help the E.D. to find a position with another grantee.

The money for the exit strategy could be amortized over the length of the ED’s term, placed in the annual budget and set aside to be used only if the E.D. serves out her/his term and meets other criteria established by the board and agreed to by the Executive Director. Worst case scenario if the E.D. doesn’t work out, is a reserve of cash that can be used for a job search for the next E.D. or other purposes.

This can also help with succession planning. Knowing that an ED’s time is limited can help an organization prepare well in advance for a transition that is traditionally rocky and a search that can be disastrously expensive.

Another benefit is in the kind of candidate that an organization attracts when job seekers understand the policy. It can weed out those looking for a safe, life-long berth and may be more likely to engage leaders who understand that strategic change and adaptability to an ever-changing environment is necessary for an organization’s health and long-term sustainability.

I’d love to know what others think about this – expecially E.D.s – so please feel free to let me know!

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