What Is An Annual Directional Statement and Why Should Every Executive Director Have One

I am a huge believer in organizational annual directional statements for two rather simple reasons. First, the annual directional statement provides clear instructions as to what the board expects of the Executive Director. Second, I’ve found that most effective nonprofit organizations consistently use annual directional statements. 

What is an annual directional statement?

An annual directional statement is a document that can contain just a few or as many as ten or twelve goals that the organization will endeavor to accomplish in a specific year. It should contain goals for both the Executive Director and the board. It is jointly created and then approved by the Executive Director and the board.

These goals are simply written and completely measurable. 

When an organization has developed a two-three year strategic plan, the goals in the annual directional statement are the practical steps that accomplish this plan. 

An annual directional statement is critical to a successful Executive Director’s annual performance review.

An annual directional statement is a key component of the performance review process for the Executive Director because it provides the documentation for assessing the success of the Executive Director for that year.

I believe that it’s risky for a board of directors to implement a performance review on their Executive Director without the benefit of an annual directional statement.

Why? Because without tangible goals, the Executive Director is vulnerable to well-meaning board members’ subjective opinions regarding the kind of job he/she is doing as the leader of day-to-day operations.

An annual directional statement includes tangible goals for the board of directors as well as the Executive Director.

I believe the relationship between the board and Executive Director is based upon “sacred trust” because of how dependent they are on each other to successfully fulfill their duties to protect and advance the organization. 

The board trusts that the Executive Director will follow their policies and guidelines as they lead the organization and implement oversight of day-to-day operations and the Executive Director is dependent on the board to provide adequate and timely governance decisions of the corporation.  

By containing goals for both the governing body and the executive leader, an annual directional statement provides a process for mutual accountability as these two organizational roles work closely together to protect the corporation and advance the organization’s mission.

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