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Is this management structure legally sound?

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Is this management structure legally sound?

Our board of directors is proposing an unconventional organizational structure in response to our executive director's struggles with operational responsibilities. They are suggesting making the current executive director the chief development officer and then hiring a chief operating officer - both of whom will "co-manage" the organization and both of whom will report directly to the board. Is this proposed structure legally sound? As the grant writer/manager, my main concern is who would sign contracts/act as the main contact for the organization? And really, who would be in charge under that structure? 

This is the kind of reorganization often suggested when an organization grows beyond the founder’s capacity to manage and the board wants to keep the founder involved in a way that better utilizes the founder’s talents and energy while assuring that the organization works well as an organization.  There is nothing illegal about it, but it does not provide the normal locus of responsibility and accountability in a single CEO and could be a tough transition.  It is inherently difficult to apportion someone’s self-identification by transferring a significant chunk of his or her duties to another.

The “co-managers” will need to communicate well and, assuming that they don’t have to agree on every management decision, will need understand who has dominant (or entire) responsibility for which decisions.  The staff should have a good idea how the responsibilities are assigned as well.  In your realm of fundraising, presumably the new chief development officer will be the point person for your work.

The board will have a greater level of involvement in oversight of the organization’s operations.  If the new arrangement doesn’t work out, they will probably want to change it, or the people involved. 

Monday, March 25, 2019

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Berks Connections Pretrial Service went into this structure several years ago and it is still working well. When the previous Executive Director announced he was leaving both the Director of the post incarceration services and the Director of the pretrial services applied for the position. Both the directors and some board members contacted PANO to seek help in implementing this should the board decide to have co-directors. The key is that both Directors worked very well together and were both experts in their roles. We suggested that they get as much in writing as possible in terms of who was responsible for what parts of operations, i.e, finance, resource development, HR, providing support to the board etc. in addition to the specific program areas. Included in this was the reporting structure to the board which the board also had helped to document and then educated the board on how things would work.

To this day, it is still working well.

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