Nonprofit boards are often criticized for a lack of vigour, being subservient to their executive directors, and weak evaluation of their chief executive, says Jan Masaoka in a recent issue of Board Café. Fortunately there is a tool that potentially overcomes all these weaknesses – an executive session of the board.

When the board meets in executive session, staff members are not present. Sometimes a lawyer or other paid advisor may attend, but not staff. The need for frank and informal discussion about staff and agency performance, and the importance of the board developing a sense of itself are just two reasons why many boards choose to hold executive sessions. Masaoka lists several others:

• Annual meeting with the auditor 
• Evaluation of the executive director, and establishing the executive director's salary 
• Conflicts between two board members, or serious criticism of one board member by another 
• Investigation into concerns about the executive director, or a report from a management consultant 
• Review of salary schedule, compensation policy, and other HR issues 

As well, some organizations establish a modified executive session at which the executive director may be present but no other staff. Discussions at such sessions may include lawsuits, complaints, or grievances from staff or former staff, individual staff situations, and the performance evaluation of the executive director. 

Executive directors should be guests, not members

It is important to note that the executive director of a charity is not automatically on the board of a charity, even though her regular attendance at meetings may lead people to assume otherwise. Theresa L.M. Man of Carters Professional Corporation warns that “at common law, directors of charities are not permitted to receive remuneration from the charity with which they serve on the board. As such, assuming that the executive director is not a volunteer but is a paid staff of the charity, then at common law, it is not permissible for the executive director to be on the board.” 

Nor is the executive director a “non-voting member,” another common but mistaken assumption. Ms. Man cites an opinion from the Public Guardian and Trustee of Ontario that it is not legal for directors to be non-voting. “A director is charged with the fiduciary duty to manage the charity and to be actively involved in the charity's decision making process,” she says. “The PGT is therefore of the position that if a director is non-voting, then this director is not in fact acting as a director.”

Awkward doesn’t mean unnecessary

There is no doubt that some awkwardness occurs when staff members are asked to leave the room. It can feel threatening if relationships are already tense and unnecessarily secretive when relationships are sunny. However, there are always conversations that are appropriate for board members only. 

For example, says Masaoka, one board member might want to raise a concern about the Development Director to see whether others share the concern or whether his negative experience was the exception. Another board member might want to discuss an issue involving herself and another board member without getting staff involved. A frank discussion of the executive director’s strengths and weaknesses may results in greater clarity about the board’s expectations.

In this editor’s experience, if those conversations don’t happen in an executive session where action may be properly discussed and approved, they will inevitably happen in the parking lot or coffee shop afterwards. They are likely to be continued by e-mail with a liberal use of the “reply to all” function—all without the normal chairing process, etiquette and self-awareness of a formal meeting. 

Such discussions are likely to be longer and highly subjective as they take on the tone of informal, unguarded conversation. They will also be frustratingly ineffective because they take place in a forum with no mandate for decision and action. Directors may develop the perception that “we talk and talk but nothing ever happens” without recognizing that the talk is not happening in legitimate meetings.

Executive sessions as regular practice 

Executive sessions can help the board develop a sense of itself as a proactive, autonomous group rather than a roomful of individuals who lean on the executive director for leadership.  Masaoka says that such a sense of self is “an intangible yet critical underpinning for board leadership.” 

Even when the board and staff share the understanding that executive sessions are necessary, calling one without warning in the middle of a meeting is a good way to drive the executive director into the arms of a recruiter. A better solution is to provide for an executive session on every agenda or on a certain number agendas per year. In a culture where trust is high, executive sessions then become a normal practice, allowing the board to meet in private without alarming staff or creating rumours. 

The minutes of the meeting, notes Masaoka, should indicate that the board met in executive session and report on the topic of the discussion. The specifics (for example, the amount of a lawsuit settlement) may be confidential and appear only in a set of confidential-to-the-board minutes or other notes.