EXECUTIVES DO THEMSELVES A SERVICE IF THEY TAKE JOINING A NONPROFIT BOARD NEARLY AS SERIOUSLY AS JOINING A CORPORATE BOARD
Accountability and Consequences Go With Nonprofit Board Membership Too
NEW YORK CITY (December 11, 2007) - It’s often flattering to be asked to join a nonprofit board, especially if you share the organization's values and commitments. And serving on a nonprofit board can also lead to valuable networking opportunities.
However, the decision to join should never be a "no-brainer," according to executives at Marks Paneth & Shron (MP&S), an accounting firm with a significant nonprofit practice. As with corporate boards, there can be risks. Hidden, and even minor conflicts of interest and governance gaps on nonprofit boards can result in embarrassing, time-consuming situations. Some of those can damage board members' reputations and credibility.
Key Questions and Issues to Address and Consider Before Joining a Nonprofit Board
Mike McNee, partner in MP&S's nonprofit practice, is available to discuss key questions and issues that people should address and consider before joining a nonprofit board. Among them:
- Do you know the nonprofit board’s real mission? And are you fully aware of the duty of care, obedience and loyalty you will be subject to?
- Did you receive, and did you review, the nonprofit board’s "packet"? It should contain bylaws, description of committees and functions and information on the charter. It’s important to digest the packet before deciding whether to join.
- Does the organization have a whistleblower's policy? There should be a confidential way for organization employees to bring up and discuss matters regarding management indiscretion, procedural problems and so on.
- Does the organization carry a directors & officers insurance policy? This is important to protect you and other board members from unforeseen lawsuits and judgments.
- Are there conflict of interest guidelines? You should know very specifically what constitutes a conflict of interest – so you can monitor and have a say over other board members’ activities and make judgments about your own.
- What’s the tone at the top of the board? Is there too much focus on connections and personal networking to fulfill the mission and make sound decisions?
- How does paid management carry out its fiduciary responsibilities? If the executive director or other staff members have override over the board, proceed with extreme caution. Also, beware if management doesn’t provide periodic internal audit statements.
- By expanding the board, is the nonprofit going for quantity over quality? Since board members usually give, there's real incentive to expand a board. Is the quality of the members and their insights high?