Dani Robbins

Who’s Appointing your Board?

In Leadership, Non Profit Boards on February 19, 2014 at 4:27 pm

My most recent article on answers.com generated more attention than any of the 60+ articles I’ve written thus far. It was titled Board Seats are Not for Sale and they shouldn’t be. Yet, there are a variety of ways to join a board, and more than a few organizations who routinely allow corporations to appoint senior staff to the agency’s board of directors.

I thought today’s blog might be a great way to talk about how to deal with this practice, avoid it when possible, live with it when necessary and advocate against it when required. The executive’s job, among other things, is to engage and build the board. It’s easier when board members come believing in your mission, but it’s possible even when they don’t.

If a corporation in your community feels that they should have a board seat because they support your organization, it is imperative upon you as a leader to figure out how you can meet their needs while honoring your agency’s autonomy.

Perhaps instead of allowing them to appoint someone, you can ask them to give you the three names of the people who are interested in your agency.  Your committee can interview those prospects and recommend the one that you think is best aligned with the work of your organization. Perhaps you can negotiate and have their people serve on a committee prior to appointing them to a board seat.

Let’s be honest, corporations has some skin in the game too. They want to protect their investment, and we want them to, but we don’t want to abdicate our responsibilities. In the best case scenario, it may be that the corporation is aligned with and dedicated to the work of your organization. Even in that case, they do not have the moral or actual authority to make board appointments.

Most board members’ companies support the organization, yet that’s not why they’re on the board. It is also true that a lot of organizations do not consider board prospects that have not supported the organization, either personally, through their company or with their time. Supporting an organization is not a guarantee of a board seat.  Not supporting an organization may ensure you are not invited to serve.

I, myself, have had that very conversation with a community development person of a local company who wanted to serve on our board but didn’t support our organization. He said the company only supported organizations on whose board their staff served; after mentioning this to the Chair of the Board Development Committee, I said we only put on board members who support, financially or otherwise, our organization. It was a stalemate.

Was I suggesting our board seats were for sale? Not at all! We had plenty of corporate donors whose staff did not serve on our board. Even if the company had supported our organization, the board development committee might still have not recommended him to serve on our board. Why would they? He wasn’t a volunteer; he wasn’t a committee member; he wasn’t a donor; he wasn’t even an advocate for us in the community. He had no role in our organization. There was no reason for us to consider him to serve on our board.

Now that was a fairly low stakes stalemate. It would have been a much harder conversation had his company supported our organization and had he been a volunteer or an advocate for us. It would have been an incredibly hard conversation has his company been our largest donor.

I spent a good part of my time in that role raising money and an enormous amount of energy trying to diversify our funding base.  As such, we didn’t have one huge donor, but if we had – it wouldn’t have just been a different conversation; it would have been a dance.

The company might have given us a name, and we might have agreed or we might have countered with a different name. We might have had full board at the time and invited their person to serve on a committee. Or we might have stalled. We might have pushed back or we might have acquiesced.

At the end of the day, Executive Directors are tasked with ensuring their organizations are still standing tomorrow. Allowing a practice that is likely to generate a board that cannot perform its role is not fulfilling the Exec’s leadership responsibilities or the board’s governance responsibilities.

It has been suggested to me that executive directors who advocate against allowing corporate donors appointing board members may be at risk of losing their jobs. I hope that is not true but if it is let me say to the boards out there: this, alone, is not an appropriate reason to fire your executive. His or her job is to protect your agency and support you in fulfilling your governance responsibilities.

Donors, even corporate donors, do not have the authority and should not have the authority to appoint board members. I know this is easier said than done but it is better to walk away from a gift that is not aligned with your values and your responsibilities than to allow somebody to dictate something that is distasteful to you.

To the corporations out there: Please do not set the authority to appoint board members as an expectation of your financial support. It is against the best interest of your company, the organization and your community. It also may be a liability for your company. If your control the board; you may be held responsible for its decisions. Never underestimate the damage that can be assessed by the court of public opinion.

If you want an organization to be viable, sustainable and to uphold their governance responsibility, you have to allow that organization to do just that.  By appointing their board members you are encouraging them to abdicate their responsibility, which will then prevent you in the future from holding that organization accountable.

There have certainly been cases where great board members have been appointed by corporations. It is more often the case when disengaged and disinterested members have been appointed.

Donors have the right to have their gift spent in the way that they intended it to be spent. They have the right to expect transparency and fiduciary responsibility and for organizations to meet its mission and be good stewards of the community’s resources. Donors do not have the right to a board seat.

If this has routinely been the practice of your organization, I recommend that you create a board development plan including a training process so that board members really understand their governance responsibilities.  Once you have, begin to lobby a few powerful board members individually to advocate changing that practice.

Board development is crucial to board leadership and board leadership is critical to strong agencies.  Board seats are like gold; there are precious. You only have so many and the people in the seats have big jobs. The only people making the decision about who should fill those seats in the future are the people in those seats today.

What’s been your experience in corporations appointing board members? As always, I welcome your insight, feedback and experience. Please offer your ideas or suggestions for blog topics and consider hitting the follow button to enter your email. A rising tide raises all boats.

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