Tips for Dismissing a Leader and Managing a Transition

When a charity’s board concludes that it is time to dismiss an executive director, the key to a

well-managed transition — one that unfolds with a minimum amount of damage to the organization and the individuals involved — is excellent planning and communication, says Jerry Paul, who is chief executive of the Deaconess Foundation, in St. Louis, and has served on more than 25 boards.

Mr. Paul and other experts say boards that are considering letting a leader go should take the following steps:

• Maintain a rigorous and regular system of reviewing an executive director’s performance. “The reviews will give an awake board a sense of whether there’s a problem and help them to avoid any terrible surprises,” says William G. Bowen, former president of the Andrew W. Mellon Foundation and author of The Board Book: An Insider’s Guide for Directors and Trustees.

• Before taking any action, make sure that board members are in agreement about what should happen and why. Don’t let a single board member drive the move to dismiss an executive director, urges Richard L. Moyers, director of the Nonprofit Sector Fund at the Eugene and Agnes E. Meyer Foundation, in Washington.

  “The ideal is to have many voices around the table with everyone participating,” Mr. Moyers says. “If a board isn’t really engaged it can be really easy for a single person to push things in a particular direction.”

• Once the board concludes that an executive director must be fired, members should move swiftly to carry out that decision. “It’s much better to move earlier,” says John Tropman, professor of nonprofit management and social policy at the University of Michigan’s School of Social Work, in Ann Arbor. “Boards have a tendency to delay because the action of getting rid of someone seems so severe.”

• Decide how the organization will be led in the days and weeks after the termination, including possibly hiring an interim director.

  “An interim director can play a very helpful role in helping a charity to right itself,” says Alan P. Brownstein, executive director of the National Alliance for Thrombosis and Thrombophilia, in Tarrytown, N.Y., and a former board member of several national health-related organizations. “A transition can become a very positive experience if it’s organized well.”

• Formulate a communications plan in advance, including selecting a single person from the board to speak with the news media. “Decide ahead of time what your message will be,” says Mr. Paul, “but recognize that the press may already have decided what story will be presented irrespective of what you might say.”

• Craft a plan for communicating with staff members and key supporters. Be prepared to answer their questions honestly and as completely as possible, says Mr. Paul, but also recognize what not to say. “Don’t engage in speculation or share personnel-related details inappropriately,” Mr. Paul says. “You should also avoid engaging in ‘ain’t it awful’ stories about what the executive did to deserve this.”

• Consider summoning outside expertise to guide the board through the firing process. A lawyer can ensure that any communication between the board and the outgoing executive, severance packages, and nondisclosure agreements meet legal standards. Public-relations experts can help with a communications plan, for example, while board-development consultants can assist with identifying the specific roles of trustees and officers.

• Make sure that the charity has insurance to protect directors from a lawsuit over a dismissal. Most providers of directors and officers insurance provide a risk-management program that includes access to a lawyer, says Damian C. Caracciolo, vice president of CBIZ Risk and Consulting Services, a national benefits specialist and financial-services company with headquarters in Cleveland. “If you say to them, ‘We’re thinking of terminating our officer,’ they’ll walk you through the legal implications of that decision,” Mr. Caracciolo says. He also suggests that the organization review its employment policies and procedures: “You always want to be able to argue, ‘We followed protocol.’”