Executive Role and Board Stewardship

Part Two─Executive Role and Board Stewardship

Within this compact design, the role of an executive director or equivalent senior manager requires careful handling. The temptation in a small organization is to give the executive director a voting seat on the commons corporation board on the theory that this person knows the most about day-to-day operations. In a conventional nonprofit that choice is common. In a small commons corporation it is usually a mistake.

The executive director should participate in board meetings, present reports, answer questions and advise on decisions. That participation is vital. What should be avoided is granting the executive director a voting seat on a small board.

There are several reasons.

The first is self oversight. The board is responsible for hiring, evaluating, compensating and, if necessary, removing the executive director. When the executive director has a vote at that table, the line between supervisor and supervised blurs. In a seven or nine member board, a single vote might not matter as much. In a three or five member board, each vote is critical. A manager voting on decisions that determine their own tenure and pay undermines the independence that the board is supposed to provide.

The second is concentration of power. In a small CCE the executive director controls information about operations and often controls staff careers. If that person also holds a board vote, the combination of formal authority and structural influence can overshadow worker and independent voices. The commons corporation becomes, in effect, a manager-dominated entity that merely gestures at worker centered allocation.

The third is confusion about whom the board represents. In this framework the board stands for the long-term interests of the commons structure and the worker body across time. Management’s task is to run the enterprise within the constraints that the board sets. When the executive director becomes a voting director, it becomes harder to see the board as anything other than an extension of management. That is particularly true when the board is small and members are drawn from the same local circles.

The fourth is the effect on worker and independent directors. On a three member board with one worker director, one independent director and one executive director, every contested issue becomes a showdown in which the person who controls daily assignments and evaluations sits as a peer. Workers may feel pressure to self censor. Independent directors may find that vigorous oversight leads to tension with the manager they are supposed to support in public.

These concerns do not require that the executive director be kept at arm’s length. Instead, they point to a better arrangement. The executive director can be designated as a non-voting, ex officio participant in board meetings. That role allows full access to meetings, including the right to speak, propose agenda items and present materials, while reserving voting power to directors whose sole fiduciary duty is to the commons corporation and its worker-oriented mission.

The board can and should hold executive sessions without the executive director whenever it is dealing with performance evaluations, compensation, succession questions or sensitive internal investigations. Those sessions are a normal part of healthy oversight and do not signal distrust.

If a CCE nonetheless decides to place the executive director on the board as a voting member, that decision should at least be limited. It is particularly unwise in a three member board. In a five member board, safeguards become essential. Key decisions about executive employment should require approval by a majority of directors other than the executive director. Certain decisions, such as amendments to worker protections or to the retained surplus covenant, should be reserved to worker and independent directors. Even with such safeguards, the advantages of a voting executive director are slim when compared to the clarity and integrity of a non-voting ex officio role.

Bringing It Together for a Two Part Commentary

Read as a whole, these design choices show how a small CCE can align practice with principle. Simplified boards, combined officer roles and a unified Budget and Allocation Committee can carry the architecture without draining scarce human resources. Worker voice, independent oversight and the retained surplus covenant remain central despite the reduced scale.

Within that lean structure, treating the executive director as a non-voting participant rather than a voting director keeps governance focused on stewardship rather than management. The board retains its identity as guardian of the commons structure and workers can trust that the person who supervises them day to day does not also control the body that is supposed to supervise that person in turn.

Split into two parts, one commentary can explore the general problem of scaling down governance while preserving the core, and the second can focus on the specific question of executive leadership and board design. Taken together, they provide a practical guide for anyone trying to build a smaller commons corporation that truly lives by its own principles rather than merely borrowing its language.