The Board's Role in Ensuring Competitive Compensation for Key Administrators

In yesterday's Online Forum discussion, a question was posed about the role of the board's compensation committee with respect to the salaries of key administrators that would get reported on the school's Form 990.

While many of the responses to that query appropriately indicated that the board only sets the compensation of the Head of School (HOS), Chairs should not overlook

one of the most important governance responsibilities of a board which is to ensure that the Head of School has the resources necessary to attract and retain a strong leadership team.

While the board directly sets the compensation of the Head of School, the salaries of other senior administrators — such as the CFO/Business Officer, Director of Development, Director of Admission, and other key leaders — does fall under the Head’s authority. These are management decisions. However, these positions often appear on the school’s Form 990 as highly compensated employees, which means the board has a fiduciary responsibility to ensure that compensation levels are reasonable, competitive, and aligned with the school’s long-term financial planning.

The board’s role is not to set these salaries, but rather to ensure that the school’s financial model supports the ability to recruit and retain exceptional talent in these critical roles.

Why This Matters for Governance

Strong independent schools depend on more than an effective Head of School. The leadership team surrounding the Head — finance, advancement, enrollment, and operations — plays a decisive role in a school’s long-term health.

Boards sometimes focus heavily on Head compensation while overlooking the compensation structure for the rest of the leadership team. Over time, this can create risk:

Difficulty recruiting experienced administrators
Leadership turnover in critical positions
Strain on the Head of School who cannot build or retain a strong team
Compensation levels that fall behind market benchmarks

From a governance perspective, this is ultimately a strategic capacity issue.

A Tool Boards Can Use: NAIS DASL Benchmarking

One of the valuable resources available to ISCA members and their Heads is NAIS DASL (Data and Analysis for School Leadership) benchmarking data, which allows schools to compare compensation levels across independent schools by size, region, and type.

For the purpose of this post, I ran a report in DASL (like all ISCA members can do) assuming I represented a midwest elementary school with 275 students. I was able to find median salaries for CFOs among midwest schools ($140K), and nationally among elementary schools ($147K) and among schools with with a total enrollment of 201-300 students ($138k).

Even when looking at narrower segments for Midwest day schools, the median CFO salary was about $128K. These kinds of benchmarks help boards and Heads answer an important question:

Are we financially positioned to compete for the leadership talent our school needs?

How Board Chairs Can Approach the Conversation

The Board Chair or Compensation committee can play an important role in framing this as a strategic partnership conversation with the Head, not a compensation review exercise.

A helpful approach might include questions such as:

Do we have the financial capacity to attract and retain strong senior administrators?
How do our compensation levels compare to peer schools in DASL benchmarks?
Are there leadership roles where market expectations are rising faster than our financial model allows?
Does our long-term financial plan incorporate the cost of competitive leadership compensation?

Governance, Not Management

This key governance distinction is important. Ultimately, competitive compensation for key administrators is not simply an operational issue — it is part of the board’s responsibility to safeguard the long-term leadership capacity of the institution.