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The Head’s Contract: Getting it Done

Since 1983, thousands of boards worldwide have retained Littleford & Associates to help them benchmark the compensation and benefit package for their head of school. Many undertake this process annually in order to ensure that the package is competitive relative to the marketplace. Schools also need to be attentive to the head’s personal and professional needs and goals while keeping in mind the school’s budget. Finally, for US based schools, this benchmarking process establishes compliance with the Intermediate Sanctions Act governing executive nonprofit compensation. If our US based clients have not heard of “The Rebuttable Presumption of Reasonableness Checklist”, (an IRS required document), please give us a call.

I. The Head’s Contract is Often the Last One to be Reviewed and Finalized

One of the most disappointing trends of the head compensation process worldwide is that boards often overlook the head’s contract right up to, and even past the actual contract deadline or neglect it completely. We have always been amazed that boards and board chairs assume that a head of school will demonstrate the “care and feeding” of the faculty by ensuring that their contracts and compensation agreements and packages are in place on a timely basis. At the same time, however, these board leaders forget that the head of school’s contract is up in six months or less or is already past due.

There is the expectation that the head should “not sweat it”. But the reality is that in delaying closure on the head’s contract the Board takes a risk that the head, feeling overlooked and unimportant, will walk away from the school to accept another offer. This delay also puts the head in danger of not securing another job should the board/head relationship fail.

Many boards value and respect their heads highly and have no intention of dismissing them. And yet, by early spring many heads still do not have their compensation decisions and contracts formalized for July 1 of the same year. It is embarrassing for a head to have to ask the board chair, “By the way, my contract ends in twelve months (or in eight, six or in the next three months), and when does the board plan to address it?” Can you imagine how the head’s spouse, family, friends or professional colleagues, who may know about this lapse, feel? Many self-effacing heads simply worry silently, and even the most extroverted types find the entire compensation review and contract renewal process awkward and even demeaning.

This is unprofessional board behavior that hurts the board/head relationship; damages the board chair/ head partnership; and can seep down into the ranks of senior administrators if they get wind of it. Senior administrators may lose confidence in the board and wonder about the security of this profession and of their own jobs.

That is how Littleford & Associates started its head compensation services in 1983 and why our Firm is still among the leaders worldwide in this business. We have come to understand these patterns and the integral relationship of the head’s contract and the head’s tenure to the school’s health and stability and the satisfaction of the constituent groups.

II. Consequences of the Board’s Failure to Address the Head’s Contract in a Timely Manner

A sudden head of school departure with less than twelve months’ notice always sends negative messages: the board fired the head or the head resigned with very little warning and took another position due to feeling overlooked and unappreciated; or in many cases, it points to a poor relationship between the head and chair or between the head and the board. Such a departure signals a lack of professionalism, trouble in the school house and results in a weakened ability to launch a healthy search on a timely basis and to sign a strong candidate. Increasingly today the expectation is that both parties should give the other eighteen months or more of notice. This Consultant, however, believes that more than eighteen months results in an unnecessarily protracted search.

Why would very attractive candidates be available on very short notice? Most sitting heads have a strong moral compass and would not leave their current school high and dry with limited prospects for finding a capable successor. What message does it send to viable sitting heads of schools or to rising second tier leaders that a school is launching a last minute search? Most of the schools that find themselves in this position should go with interim heads, but few do so.

Boards of independent and international nonprofit schools have one employee and that is the head of school. Hiring the head, evaluating and supporting that person and ultimately, if necessary changing the head represent one of the key strategic roles of a board. To forget or overlook this role is more than unfortunate or unprofessional. It is dangerous.

It takes many years for a school to build an enviable local, regional and even global reputation but a board’s failure to nurture and affirm a valued head can damage that good name in a very short time. There is a flip side to this, of course. Heads who look around for a new job every year while still expecting to hold on to their current post and thinking they will not rub raw the feelings of the board, are skirting close to the edge of being dismissed.

John C. Littleford
Senior Partner