“You would be an excellent person to serve on our board of directors.”
More often than not, we are honored to receive a request to serve on a board of directors of a nonprofit organization, especially if it is a nonprofit we respect and admire. The decision to accept an offer to serve on a board of directors is highly personal and one to be carefully considered, whether it is a first opportunity to serve or the latest in a lifelong connection with the Third Sector. Without saying, governance is a critical nonprofit issue.
Serving as a member of a board of directors or a board of trustees can be as damaging to a personal career as it can be enhancing. The failure of a nonprofit executive and/or leadership team, whether ethically, financially or operationally, reflects directly upon those charged with the protection of the public trust. Recent examples of nonprofit scandals include the University of Virginia, The Susan G. Komen Foundation, Penn State University, and the Greater Lawrence Community Action Council (GLCAC). No organization is completely immune to risk.
You want to serve. You want to be an advocate for your community. But how do you mitigate your own personal risk prior to accepting an invitation to serve? There are questions you must not only of yourself but of your fellow board members and the nonprofit’s leadership team.
Duty of Care, Duty of Loyalty, Duty of Obedience
First, are you willing to commit the time necessary to be an engaged and effective board member? If not, do not pass go and do not collect $200. You will do the organization a disservice and you are putting yourself at risk. You must be able to meet the Duty of Care expectation. When things go south at your organization and personal liability becomes a possibility, were you exercising care and judgment in your duties? Did you actively prepare and engage in the governance process? An absentee or disconnected board member is just a liable as the board member fighting for the benefit of the agency each and every day.
Second, can you exercise the Duty of Loyalty in the best interest of the organization? You must be able to act in good faith and to disclose, prior to accepting an invitation, any conflicts of interest you perceive may exist. From my own experience as a nonprofit employee, I have witnessed a nonparticipating member of the board of directors provide incorrect information to the local media. Why? Because it was politically expedient for this individual. He/she did not bother to consult with the organization’s leadership or peer volunteers on the board of directors before publicly chastising the agency.
Third, are you willing to meet a Duty of Obedience to the agency’s mission, bylaws, and policies? If the organization has a zero-tolerance policy with regard to alcohol, the board of directors is not exempt from meeting this duty when conducting organizational business. This includes holiday parties or social gatherings to the benefit of the nonprofit entity. You are the standard bearer and you must conduct yourself as such.
Finally, from a more “nuts and bolts” perspective, the first question you should ask when considering accepting a position on a board of directors or board of trustees is the current status of the Directors and Officers (commonly referred to as D&O) policy. Do not hesitate to ask to see the policy itself and ask for verification the policy is current. Without such insurance, you are unprotected for any misdeeds or illegalities on behalf of the organization in any capacity.
You are the trustee. You are the board member. The entity is given nonprofit status because the public trust has been placed in your hands. The Third Sector needs your leadership and it needs your commitment. But you deserve to be protected from the unforeseen.