On Nonprofits ©
February 2006

Serving a Dual Master can be Dangerous

Q:  I need a definitive answer!  Can a staff member serve on the board of the organization for which s/he works?

A:  The only “definitive” answer is that it depends on your bylaws or your own written policies.   State and Federal law are mute on the subject, so if it is not prohibited in your documents, you could assume that it is okay.  That being said, it is not a good idea to have an employee sitting on the board.

Yes, you will have someone who– presumably – is dedicated and really knows the organization, its mission, stakeholders and place in the community.  However, I believe that benefit is wiped out by the negatives that such a situation engenders.   

First is the issue of role confusion.  The executive director supervises all staff, but the board supervises the executive director.   A staff member on the board means that in one situation s/he is the subordinate and in another s/he is the boss.  What happens if the executive director as supervisor does something that the staff member either individually or as a part of the larger staff doesn’t like?  Is that going to impact how the staff member as board member/boss handles the grievance, writes/implements policy, makes recommendations/decisions or evaluates the executive director?  What about other staff?  Will they feel encouraged to do an end-run around the executive director and work through their colleague and their colleague’s colleagues on the board?  And if any of these scenarios are possible could that conceivably impact the decisions that the executive director makes in the first place, perhaps to the detriment of the organization?

Perhaps a greater issue, however, is the ability of the staff member as board member to fulfill his/her duties of loyalty and care.   Duty of loyalty requires that board members put the organization’s needs ahead of their own.   They not only have to avoid conflicts of interest, to truly protect the organization they should avoid the appearance of any conflicts of interest.  Because boards often write policies or make decisions that impact staff, having a staff member serve as board member would require that person to recuse him/herself from discussions and votes that could potentially impact his/her position.  This individual might end up spending more time out in the hall than in the boardroom, depriving the total board of an important perspective and affecting everyone’s ability to meet the duty of care, which requires all board members to make the best informed decisions possible for the organization.  

Related to the above, if your staff member serving as board member does happen to participate in decisions with the potential for personally benefiting him or her, it could cost the entire board financially.  Let’s say the individual votes on the budget and that budget includes salary increases for staff.  If the percentage of increase was ever challenged as being too high that individual could bring excess benefit taxes on the entire board up to 200% per person of the amount determined to be “excess.”

Personally, I would suggest going outside the staff to find board members. While recruiting from within may be legal, it isn’t prudent.