Ethics Q & A
November 24, 2003
By Jane Garthson, Mills
Garthson & Associates
The dilemma:
Fifteen years ago, my husband and I had a dream of making our little commercial sector stronger by bringing together isolated businesses in our field into a new national association. Since then, we have put thousands of hours into this dream, and taken time away from our own business that cost us plenty. We have three hundred and twenty members, and know we have really helped those businesses.
But some of the owners are retiring, and as chair I need new board members. The four people I approached this month all turned me down, saying they don't want to get involved running an organization where the Chair and the Executive Director are married to each other. Also, they asked why I was still on the board at all, since usually bylaws force people off after no more than ten years.
This isn't fair! We are the ones who had this idea and sacrificed a lot to make it happen. The Board service is just a formality. Board members show up twice a year for a nice dinner and to ratify our decisions. How can I convince prospective directors to accept this arrangement?
Jane says...
Your members have likely been following some of the governance coverage in the business press over the last few years, and have realized that board members bear some liability for the actions of the organization. The public and media ask, "Where was the board?" every time something goes wrong in a for-profit or non-profit organization. They may also have received governance training in the course of serving on other boards.
So they cannot accept the idea of just ratifying the decisions of others, especially decisions in this case in the key board responsibility of managing and evaluating the chief staff officer. No one can be perceived as fair and impartial when an immediate family member is involved. As chair, you are in a serious conflict of interest situation which cannot be resolved just by declaring a conflict.
You need to decide if the organization is all about you and your egos, or all about its mission. If the latter, then you need to build structures that survive even if both of you suddenly become unavailable. The usual term is "get hit by a bus". The organization is owned by its members, not its founders, and owes its nonprofit status to a mission of serving its community. Its revenues are not tax-free in order to repay your years of sweat and toil and tears, but in order to continue to strengthen and serve your members and commercial sector.
It would have been better to build a lasting structure from Day One, but all you can do is start today. You could amend the bylaws immediately to add terms and term limits, or do a complete re-write to bring them into line with current good practices. If no strategic planning has been done with the members in the last five years, consider doing the minor amendments along with a Conflict of Interest policy now. Concurrently, start consultation on the future of the organization. The results may affect other areas of the bylaws such as the definition of a member.
To gain participation in both these initiatives and a belief that they will make a difference, I think you already know one of you needs resign now from any leadership role in the organization. That person could continue as a non-board volunteer, preferably in non-strategic function. If the Executive Director resigns, note that the chair will soon be gone too due to the new term limits. And if the Executive Director stays, his performance will have to satisfy the new Board.
As well, an organization which has been this tightly controlled needs a strategic planning consultant from outside the organization and a lawyer with specialized knowledge of nonprofit bylaws. The new advisors should have no family or business connections to the organization or yourselves.
My hope is that you and your husband will be honoured by the organization for the wonderful service you have provided, and be very proud of the legacy you have given to your business sector.
***********
Because nonprofit organizations are formed to do good does not mean
they always are good in their own practices. Send us your ethical questions
dealing with volunteers, staff, clients, donors, funders, sponsors, and
more. Please identify yourself and your organization so we know the questions
come from within the sector. No identifying information will appear in
this column.
To submit a dilemma, or comment on a previous one, please contact help@charityvillage.com.
***********
This article is reprinted with permission from Association
Xpertise Inc.
