I have served on several nonprofit boards in the past few years and I have observed that the majority of these Boards are wasteful of public money. One such Board is a particular offender: the Board Chair (who was a bully throughout her reign) completed her term as Chair and as a member of the Board of Directors, but she is still dictating the agenda and what is to be done by the new Board members. She gets her information from the Executive Director who was hired recently after a process in which the Chair was heavily involved.
The organization runs with funding from the government and the chair works for the government. One funder told her at the beginning of her term not to sign any reports which are being submitted to the government to avoid perceived conflict of interest.
Our by-laws clearly state that Board members who have completed their terms can come back on Board only after a two-year gap. She should not be participating in Board matters.
What can be done at our first meeting by us to avoid her interference? Is there any way out?
Sincerely, Haunted by the Ghost of Christmas Past
You’ve raised two different questions, each of which is relatively straightforward on its own. If your bylaws say that ex-Board members must spend two years off the Board before returning, then the ex-chair cannot participate in meetings. If she shows up at the first Board meeting of the year, you can ask the new Board chair to clarify the rules applying to your Board meetings. Most nonprofit Board meetings are open to the public—often, in fact, the state’s not-for-profit enabling legislation requires them to be—so you probably can’t prevent the ex-chair from attending. You can, however, make sure the new Board chair is prepared to be tactful but firm (or just firm) in keeping the ex-chair from joining the conversation. It would be a kindness to let the new Board chair know in advance that you’re planning to raise this question, so s/he can be prepared to respond appropriately. One appropriate response might be for the new Board chair to ask the ex-chair to absent herself from the meeting to avoid any confusion among new Board members and a relatively new Executive Director about who’s in charge.
At the same time, you may want to mention to the new Board chair that you think Madame Ex is actually setting the agenda for Board meetings—and, thus, for the agency as a whole. You can even suggest that the new chair take over Board agenda creation from the Executive Director; that will prevent the ex- from working back-channels to continue to control the agency.
Whether Madame Ex has actually embroiled the agency in a conflict of interest is a wholly separate subject. “The government” is a big enterprise, and someone who works for the Small Business Administration is not precluded from signing papers applying to the Department of Housing and Urban Development for funds. If the ex-chair works for one of the agency’s funders, though, she should have recused herself from signing the application on the agency’s behalf (on the one hand) and from considering the application on the funder’s behalf (on the other). But unless you’re concerned that the funder is preparing to claw back monies previously awarded, the Nonprofiteer thinks you should consider the signature issue a venial rather than a mortal sin and forgive Madame Ex for that, if not for her overbearing ways.
It’s not actually true that nonprofit agencies waste public funds. No business can stretch a dollar as far as the average nonprofit, which frequently finds itself subsidizing the rest of us by providing services which cost more than the government pays for them. Thus, to a nonprofit every additional person served means not increased revenue (as in for-profits) but increased debt. Madame Ex may be a miserable creature, and her power games may be typical of our benighted sector, but that doesn’t makes charities into poor stewards of the public fisc.