ETHICAL
MATTERS
Founder and
Spouse
Fifteen years ago, my husband and I had
a dream of making our little commercial sector stronger
by bringing together isolated businesses in our field
into a new national association. Since then, we
have put thousands of hours into this dream, and taken
time away from our own business that cost us plenty.
We have three hundred and twenty members, and know we
have really helped those businesses.
But some of the owners are retiring, and
as chair I need new board members. The four people
I approached this month all turned me down, saying they
don’t want to get involved running an organization
where the Chair and the Executive Director are married
to each other. Also, they asked why I was still on
the board at all, since usually bylaws force people off
after no more than ten years.
This isn’t fair! We are the ones
who had this idea and sacrificed a lot to make it
happen. The Board service is just a formality.
Board members show up twice a year for a nice dinner and
to ratify our decisions. How can I convince
prospective directors to accept this arrangement?
Jane's Response
Your members have likely been following
some of the governance coverage in the business press
over the last few years, and have realized that board
members bear some liability for the actions of the
organization. The public and media ask, “Where
was the board?” every time something goes wrong in a
for-profit or non-profit organization. They may
also have received governance training in the course of
serving on other boards.
So they cannot accept the idea of just
ratifying the decisions of others, especially decisions
in this case in the key board responsibility of managing
and evaluating the chief staff officer. No one can
be perceived as fair and impartial when an immediate
family member is involved. As chair, you are in a
serious conflict of interest situation which cannot be
resolved just by declaring a conflict.
You need to decide if the organization
is all about you and your egos, or all about its
mission. If the latter, then you need to build
structures that survive even if both of you suddenly
become unavailable. The usual term is “get hit
by a bus”. The organization is owned by its
members, not its founders, and owes its nonprofit status
to a mission of serving its community. Its
revenues are not tax-free in order to repay your years
of sweat and toil and tears, but in order to continue to
strengthen and serve your members and commercial sector.
It would have been better to build a
lasting structure from Day One, but all you can do is
start today. You could amend the bylaws
immediately to add terms and term limits, or do a
complete re-write to bring them into line with current
good practices. If no strategic planning has been
done with the members in the last five years, consider
doing the minor amendments along with a Conflict of
Interest policy now. Concurrently, start
consultation on the future of the organization.
The results may affect other areas of the bylaws such as
the definition of a member.
To gain participation in both these
initiatives and a belief that they will make a
difference, I think you already know one of you needs
resign now from any leadership role in the organization.
That person could continue as a non-board volunteer,
preferably in non-strategic function. If the
Executive Director resigns, note that the chair will
soon be gone too due to the new term limits. And
if the Executive Director stays, his performance will
have to satisfy the new Board.
As well, an organization which has been
this tightly controlled needs a strategic planning
consultant from outside the organization and a lawyer
with specialized knowledge of nonprofit bylaws.
The new advisors should have no family or business
connections to the organization or yourselves.
My hope is that you and your husband
will be honoured by the organization for the wonderful
service you have provided, and be very proud of the
legacy you have given to your business sector.
 Jane
is Principal Consultant of Mills Garthson &
Associates, dedicated to strengthening Canada's
nonprofit sector through enhanced leadership and ethics.
She is a founding member and former Chair of the Ethics
Practitioners’ Association of Canada, and was
Executive Director of a provincial federation. She has
provided ethics training to organizations such as the
United Way of Greater Toronto, International Institute
of Public Ethics and CSAE. Jane can be reached at www.millsgarthson.ca
or 1-877-645-5417.
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