Terrie on
Nonprofits ©
February 2006
Serving a Dual Master can be Dangerous
Q: I need a definitive answer! Can a staff member serve on the board of the
organization for which s/he works?
A: The only “definitive” answer is
that it depends on your bylaws or your own written
policies. State and Federal law are mute
on the subject, so if it is not prohibited in your
documents, you could assume that it is okay. That
being said, it is not a good idea to have an employee
sitting on the board.
Yes, you will have someone who– presumably – is dedicated
and really knows the organization, its mission,
stakeholders and place in the community.
However, I believe that benefit is wiped
out by the negatives that such a situation engenders.
First is the issue of role confusion. The executive director supervises all staff,
but the board supervises the executive director. A staff member on the board means that in one
situation s/he is the subordinate and in another
s/he is the boss. What happens if the executive director as supervisor
does something that the staff member either individually
or as a part of the larger staff doesn’t like?
Is that going to impact how the staff member
as board member/boss handles the grievance, writes/implements
policy, makes recommendations/decisions or evaluates
the executive director?
What about other staff?
Will they feel encouraged to do an end-run
around the executive director and work through their
colleague and their colleague’s colleagues on the
board? And if any of these scenarios are possible could
that conceivably impact the decisions that the executive
director makes in the first place, perhaps to the
detriment of the organization?
Perhaps a greater issue, however, is the ability of
the staff member as board member to fulfill his/her
duties of loyalty and care. Duty
of loyalty requires that board members put the organization’s
needs ahead of their own. They not only have
to avoid conflicts of interest, to truly protect
the organization they should avoid the appearance
of any conflicts of interest.
Because boards often write policies or make
decisions that impact staff, having a staff member
serve as board member would require that person
to recuse him/herself from discussions and votes
that could potentially impact his/her position.
This individual might end up spending more
time out in the hall than in the boardroom, depriving
the total board of an important perspective and
affecting everyone’s ability to meet the duty of
care, which requires all board members to make the
best informed decisions possible for the organization.
Related to the above, if your staff member serving
as board member does happen to participate in decisions
with the potential for personally benefiting him
or her, it could cost the entire board financially.
Let’s say the individual votes on the budget
and that budget includes salary increases for staff. If the percentage of increase was ever challenged
as being too high that individual could bring excess
benefit taxes on the entire board up to 200% per
person of the amount determined to be “excess.”
Personally, I would suggest going outside the staff
to find board members. While
recruiting from within may be legal, it isn’t prudent.
Terrie
Temkin, Ph.D. is an internationally recognized governance
and planning expert. She is president of NonProfit
Management Solutions, Inc., a principal in CoreStrategies
for Nonprofits, Inc., and a longtime member of AFP.
Contact her at terriet@nonprofitmanagementsolutions.com,
954-985-9489, or 866-985-9489.
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