The Center for Ethics, Governance, & Accountability

Board membership in a nonprofit organization is a serious job.

It’s not intended to be a resume builder. How many resumes have you seen where a person has pages and pages of boards upon which they have ‘served’ over the years? How many of you have served on boards where a quorum could not even be reached? How many have seen board members arrive with their board packets still sealed in the envelope they were mailed in? What about the board member who has such a strong stake, or bias, in the organization that rationality has been compromised? Or, the board member who is always asking questions about a financial report but does not even know anything about finances?

Sadly, these issues occur every day on nonprofit boards all across America.

Nonprofits that are serious about their futures would be wise to note the reality, deal with it head-on, and create a competitive advantage among their peer group.As the IRS states in its instructions for the new Form 990 and 990-EZ, many people rely solely on the information – which is available to the public – provided by the obligatory IRS annual filing to make decisions about the organizations required to file.

The IRS also notes that beginning with 2009 filings, expectations have been taken to a higher level. This should pose no problem whatsoever for the nonprofit organization that is at the top of its profession and takes its charitable status seriously.

Many funders and grantors are now asking questions about board attendance to determine the activity and involvement of the board. Does your organization maintain such data? It is recommended that every organization have a nominating committee that reviews applications or recommendations for board membership. The work of the nominating committee is very important in making sure that qualified individuals are selected for board membership.

As an observation, many nonprofit boards have a nominating committee and it is chaired by the in-coming chairperson/president. This does not look good. Instead, it comes across as the organization ceding its responsibility to the incoming chair and allowing him/her to select those board members with which they want to surround themselves with. Not a good idea. As an alternative suggestion, why not have the nominating committee chaired by the immediate past chair (or, better still, the past chair twice removed)? Obviously, these folks cared enough about the organization to serve as chair, learned a lot, and their knowledge could be of extraordinary benefit in selecting new board members.

At a minimum, several key questions are suggested:

• Does the prospective board member have experience related to the needs of the organization? For example, if the current board does not have a board member who is an accountant, a CPA applicant may be an important consideration.
• Does the prospective board member have an interest in the mission of the organization? How do you know?
• Has any prospective board member been solicited by a current board member and told, “don’t worry, this won’t take much of your time at all.” How will you know? Do you interview your prospective board members?
• Does the prospective board member serve on any other boards with conflicting missions? Are prospective board members currently serving on any other boards with existing directors of your organization? How do you judge conflict?
• Are any of the prospective board members currently serving as executive directors (key employees) of another nonprofit organization?
• Does the perspective board member currently serve on other nonprofit boards? How will you know if they are serious about serving on this board?

There are some interesting ‘checks and balances’ that can be utilized by nonprofit organizations that are truly serious about seating a first-class board of directors clearly superior to those of their peers. Several guidelines are suggested:

• How large is the board? Is it too large? How would your organization define what is too large?
• Look around the board table. What is the experience of each board member? If you were to look at the board list, would you see diversity – not just racial – but professional? Is there a balance of the various professions that can assist the staff and the board in issues of which the board member is extremely knowledgeable?
• Does the board member serve on boards of other organizations? Do those organizations compete with each other for funding? Does the organization consider this a conflict of interest and how would it know?
• Is the board member aware of the reasons they were selected to serve? Are they willing to provide pro-bono/volunteer counsel to the organization – or – are they willing to assist the organization in procuring those services? (Caution: use very careful judgment before hiring a board member to provide a professional service.) Does your organization have a conflict of interest policy?
• Has the board member expressed a willingness and demonstrated an ability to assist with the fundraising that is required by the organization?

In closing, a very interesting statement was overheard several years ago – specifically regarding a group of local elected officials – but, every bit as applicable to any nonprofit organization: “if this were your business, would you allow the board members (or staff, for that matter) to serve on your board?” Think about it; your answer should guide your decisions as board members are selected.

If you want your nonprofit organization to be the best, then seek to attract the very best board members you can find.