Nonprofit Boards and CEO Contracts
by James Abruzzo
Amazon Publishing, 2023
https://www.amazon.com/dp/B0C2XS675S
$2.99
Charitable nonprofits represent the finest qualities of our country by offering a platform for individuals and organizations to collaborate towards a collective good, transforming shared beliefs and hopes into action. They breathe life into our most noble dreams, ideals, and causes. There are more than 1.5 million nonprofits in America, which means that there are the same number of individuals leading these organizations. It is troubling to learn that only about 20 percent of these CEOs work with the benefit of an employment contract. For the many volunteers who make up the boards of these nonprofits, it may seem a daunting task to develop and implement such a document.
James Abruzzo, an executive recruiter, management consultant and compensation specialist for nonprofit boards and CEOs, has written a clear and comprehensive primer, “Nonprofit Boards and CEO Employment Contracts: What They Are, What Is In Them, and Why Both Boards and CEOs Should Agree to One,” to demystify this process. This 23-page book covers key topics such as the term of the contract, description of the CEO role and duties, salary considerations, bonus options and criteria, consideration of benefits and perquisites, elements of supplemental executive retirement plans, severance agreements, and successful implementation of the CEO contract.
The primer is packed with valuable and concise information on each topic that will inform CEOs and guide boards on the intricacies of the contract. Written in layman’s language, with critical dos and don’ts to avoid legal trouble, the contents provide a roadmap for a comprehensive and well-constructed nonprofit executive contract. Such a contract will ensure the board has fulfilled its responsibility toward the organization and that the CEO has protected themselves and their career.
As a person who has spent extensive time as a volunteer member of nonprofit boards, including the role of board chair, I found this primer to be a vital resource that is at once easy to read and comprehend, and yet comprehensive in scope. This should be required reading for all individuals in nonprofit leadership positions and, I trust, will serve to increase the number of nonprofit executives, and their boards, operating under the benefits and protections of a well-crafted contract.
Melissa A. Smith is the former Executive Director of The Institute for Ethical Leadership at Rutgers University and the current Managing Director of Life and Career Planning LLC. She makes her home in the Berkshires.
