Executive director positions exist in nonprofit organizations, voluntary organizations, and cooperatives, with similar qualifications and job requirements. The role provides strategic direction and manages day-to-day operations. Compensation is necessary for quality candidates. In cooperatives, the executive director executes decisions made by the group.
There are three different sectors that have executive director positions: nonprofit organizations, voluntary organizations, and cooperatives. Across all three sectors, these executive director positions have very similar qualifications and job requirements. An executive director is typically the highest ranking employee in a charitable organization, reporting directly to the president or board of directors.
As an executive director, the job responsibilities are equivalent to those of an executive director or director of a commercial enterprise. This role provides strategic direction and keeps the organization focused on the mission. Even in a voluntary organization, this is a paid position, which underscores the value of a quality candidate for the position.
In the not-for-profit sector, the organization’s goal is to provide a service in the most cost-effective method possible. The CEO is onsite to manage day-to-day operations, including hiring staff and developing a business plan. It’s a common misconception that nonprofits don’t have business plans. The only difference between private and not-for-profit industry is the rising price of services. Non-profit organizations can include a small hike in product prices to create cash flow, but they are prohibited from generating larger profits.
In a voluntary organization, the executive director is often the only paid employee. Responsibility for compliance with laws, financial guidelines and other rules of the organization rests with the holder of any executive director position. They must meet with the organization’s management committee and supervisory board to receive instructions and ensure that the required tasks are completely correct and on time. While some organizations have unpaid executive director positions, this is realistic as long as the organization is small. Quality candidates require compensation so they can dedicate the time needed to meet the needs of the organization.
A cooperative organization is a company owned by a group of individuals who participate equally in the initiative. All parties are financially invested and the entire organization is based on mutual benefit through a democratic process. In executive director positions, the person takes responsibility for meeting the specific requirements of the group. All strategic guidance and financial decisions are taken by the group, but the execution of these decisions is carried out by the executive director.
Organic farms and housing projects are the most common examples of the cooperative model. All participants are actively involved in the group’s activity and have an equal share in its success. The role of executive director is generally filled through a democratic election process and they must be members of the group. The position is generally term-based, with a specific limit on the number of terms any person can serve as a director.
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