Why your Board of Directors Should Have a Contract with You!

Most often when I hear association executives talk about the lack of a contract what I hear is “why would they give me one now; I have been working years without one” this sentiment coupled with our people pleasing need to not rock the boat leaves our associations in peril.

Your board does not know that a lack of a contract with their executive opens them up to substantial liability. They have a duty of care (a fiduciary duty) to the members, the donors, and the public. Remember that tax dollars support non-profits so that duty of care must not be minimized or overlooked! Your job as an EO, ED, AE, CEO or EVP is to ensure the organization’s liability is limited and its directors are well-informed an well trained.

Here are the top reasons to have a contract with the organization’s executive:

  • A stable and secure executive is vital to the operations of the organization- no one can effectively lead out of fear
  • The contract defines the responsibilities and performance standards of the executive position- this means that future presidents and boards will know what the boundaries and benefits of the position are
  • The contract includes a method or process for handling disputes about the process- this ensures that disagreements are handled professionally and without excess liability
  • Very important! The contract establishes that the board owns any content/product the executive produces during the period of employment
  • The contract will protect member data, confidential information about the board of directors and any trade secrets
  • The contract will limit the ability of the executive from competing directly against the association with another employer (most boards have a rival board near by- its just the nature of the beast)
  • The contract establishes the duration of employment; it gives the board the ability to end employment in a professional manner by establishing breaks and assessment periods

Remember most firings have nothing to do with work performance but are a result of a personality conflict. You owe it to your organization and yourself to ensure that a contract puts into place objective criteria and that your financial security remains intact.

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