On Nonprofits ©

August 2006

Confidentiality vs Transparency

Q: I have recently joined a board where the executive director frequently states that all board meetings, minutes and activities are to be considered confidential. I thought that we lived in an era where Sunshine Laws are the norm and transparency is the watchword of the day.

A: This is an important issue that cannot come down to either/or. There are circumstances that require transparency and others that require confidentiality and each organization must make the right choice at the right time.

While most nonprofits are not bound by Sunshine Laws, it behooves all of us to act as if we were. Between the pressures of the public, our donors and regulators we are operating today in an atmosphere that demands transparency. Financial records and in some case meetings and minutes must be made public. People want to feel comfortable that there is no self-dealing and that there are no improprieties or even the appearance of such. Even if this were not our reality, as trustees for the community we have a moral obligation to ensure our dealings are aboveboard at all times.

That being said, if we want our boards to really grapple with critical issues we expect them to be honest, expose their feelings and float ideas that might be unpopular or “out there.” If they are going to open up in this manner they must be able to trust their colleagues that what is said in the boardroom remains in the boardroom.

Conflict around issues can be an asset to good decision-making. It helps a group think through options and the ramifications of their decisions. But the benefits are outweighed if someone leaves a board meeting and comments to outsiders on differences of opinion or a close vote because it lessens the power of the final decision. The revelation of personality clashes certainly affects the credibility of the board. And, worse is the sharing of confidential information such as donor histories or, say in the case of a clinic, health records. Each of these has the potential to not only alienate board members but give the organization a very public black eye.

In this specific case we may have a situation where "confidentiality" is being used by the executive director as a means of controlling the board. There is insufficient information here to determine that. However, whether or not that is the case, one way of dealing with this or any board is to have a policy about confidentiality and to hold people accountable to that policy. If the board does not already have one, I suggest the board make writing a confidentiality policy a high priority. That way, everyone will know the limits of "confidentiality" and the reasons for it. If there is already such a policy, maybe this individual can review it to see what the executive director meant by her/his statement.