Executive directors run the non-profit’s day-to-day operations. The executive director’s role is decided by the non-profit’s board of directors. Executive directors must follow the board’s direction.
This article is for non-profits incorporated under Quebec law.
To learn more about federally incorporated non-profits, check out our article Non-profits: Incorporate With the Quebec Government or the Federal Government? or Corporation Canada’s website.
Also, the law allows Quebec non-profits to put different rules in their letters patent or by-laws in certain cases. If non-profits do this, the rules in the non-profit’s letters patent or by-laws apply to it instead of the legal rules described in this article.
What is an executive director?
An executive director is a high-level manager employed by a non-profit to run the organization’s day-to-day activities. Executive directors are usually paid for the work they do.
Non-profits can have an executive director, but it’s not required by law. It’s up to the non-profit’s board of directors to decide who will run the organization day-to-day. Our article on the board’s role has more information about the board’s other options for running the non-profit.
What do executive directors do?
The board decides what powers and responsibilities the executive director will have. So, the executive director’s role can be different in every non-profit.
As an example, the board can decide the executive director will be responsible for hiring, managing, and dismissing the non-profit’s other staff.
It’s up to the board to define the executive director’s role. The non-profit’s members have no say.
Who chooses the executive director and how?
The board chooses the executive director and decides this person’s salary.
The board has a legal duty to the non-profit to choose someone who has the skills and knowledge needed to do the job. It’s up to the board to decide how to check candidates’ abilities before choosing someone, but it must do so carefully and as well as it can.
The executive director can be a member of the non-profit or of its board, but it’s not required by law.
What legal duties do executive directors have?
Executive directors must
- respect the limits of their role as defined by the board,
- do their job carefully and as well as they can,
- be honest and loyal to the best interest of the non-profit and its board, and
- avoid conflicts of interest.
If executive directors are also on the board, they must fulfill their legal duties as board members and as executive directors at the same time. Read our article on the role of the board of directors for more information on board members’ legal duties.
What if an executive director disagrees with the board’s decisions?
Executive directors must listen to the board’s direction and follow its instructions even if they disagree. This is because executive directors are employees of the non-profit and the board is their direct superior.
The board may ask executive directors to answer questions or even give an opinion before it makes certain decisions. But, it always has the final say in deciding the overall direction of the non-profit.
Does the board need to supervise the executive director?
The board generally doesn’t need to supervise the executive director on a day-to-day basis.
If the board has a reason to be suspicious about something the executive director is doing, it must investigate. If the investigation confirms that something is wrong, the board must intervene and correct the situation.
What if executive directors don’t do their job or don’t listen to the board?
If the board isn’t satisfied with the executive director’s performance or collaboration, it can
- explain the problem and ask the executive director to fix it,
- give the executive director a formal warning,
- limit the executive director’s powers, or
- take other disciplinary action, including dismissing the executive director.
Executive directors are legally protected from being dismissed without notice or compensation, except for a serious reason. Examples of serious reasons include not having the skills to do the job, creating an unhealthy work environment for other employees, or charging a lot of overtime to the non-profit without the board’s approval.
The board also can’t dismiss an executive director in an abusive way.
One court case gives an example of an abusive dismissal. In this case, a non-profit’s board sent its executive director a dismissal letter by bailiff instead of meeting with him. It also didn’t tell the executive director about the findings of an investigation against him or let him respond to these findings before dismissing him. This executive director co-founded the non-profit and managed it for 25 years.
Who’s responsible for the executive director’s actions?
In general, non-profits are responsible for what their executive directors do as part of their job. The non-profit’s board and executive director usually aren’t personally responsible for the executive director’s actions.
But, executive directors can be personally responsible for their actions in a few situations.
Examples include situations where executive directors
- are careless,
- intentionally do something wrong,
- exceed the limits of their role as defined by the board,
- commit a crime, or
- break other laws that create specific duties for them.
If executive directors do these things, a court may order them to pay compensation for causing harm or to serve a sentence for breaking the law.
But, that’s not all. Executive directors can even be personally responsible in certain situations where the non-profit is the one breaking the law. This is because some laws establish consequences for people in an organization who allow the organization to break these laws or who participate in breaking these laws on behalf of the organization.
Executive directors can still be personally responsible in these situations even if they are unpaid volunteers. But, legal consequences may sometimes be less serious for unpaid volunteers.
Executive directors must understand and respect the legal responsibilities attached to their role. For more information or advice on their specific situation, executive directors should consult professionals, like a lawyer or an accountant.