Loose Lips Sink the Boardroom Ship

What happens in the boardroom must stay in the boardroom.

 

by Dan Busby and John Pearson

 

Board members who leak confidential information
about the ministry they serve
disqualify themselves from board service—period!
 

 

Lucas seemed to be such a good board member. He attended all board meetings and he was thoroughly prepared. His comments in the boardroom were especially insightful. He consistently encouraged the senior pastor. He was a model board member, but…

Lucas had an Achilles heel. He had loose lips. When visiting with non-board members, he frequently shared what was happening at the ministry. This would have been fine had he not gone beyond information that was publicly available.

In Lucas’ first board meeting, the board discussed an incident of fraud that occurred within the ministry. The matter had not been reported in the media. A few days after the meeting, Lucas mentioned the fraud to some friends. (Surprise! Surprise! Within a few days, the fraud incident was on the internet.)

Then, in Lucas’ second board meeting, the board discussed a moral failure by one of the ministry’s executives. Again, the matter was not publicly known. Soon after the board meeting, Lucas shared the confidential information he had learned in the board meeting with some of his business colleagues. They shared the information with others.

No one knew Lucas’ motives. However, it appeared he had a personal need to be the first to release insider information, hoping to gain personal importance by doing so.

Sadly, just the opposite occurred. Lucas’ friends and colleagues were shocked that he felt comfortable sharing information that a board member should have kept under wraps.

In some instances, a board member feels it is appropriate to leak information because he or she did not agree with the board’s decision on a certain matter. A dissident view on an issue, no matter how significant, never justifies leaking confidential information.

Rick Alvis, CEO of Wheeler Mission in Indianapolis, notes: “There are matters that a board needs to process internally and boards do not need the pressure of outsiders to ‘help’ the processing aspect. If a member of the board releases information, either good or bad, it can do irreparable harm to the organization.”[1]

It is impossible to over­estimate the importance of keeping confidences as a board member. The results of a board member with loose lips include the following:

•   Loss of personal respect. While a few people may be impressed when a ministry board member leaks confidential information, most folks will see it for what it is: inappropriate sharing of information. The end result almost always will be a loss of personal respect for the loose-lipped board member coupled with wonderment as to how the individual was ever qualified to serve on the board.

•   Loss of ministry respect. While the board member leaking information may not think his or her actions will harm the ministry, it often does exactly that. Some leaked information may have otherwise never been made public.

What should boards do to protect confidential information? The remedy is simple and straight-forward:

  1. Establish a sound board policy. Start with a board policy that addresses confidentiality guidelines and delineates who speaks for the board. Generally, this is limited to the CEO (and his or her designee) and the board chair. The policy should prohibit disclosure of information about the ministry’s activities unless the board and/or ministry decides to make the information public, or unless the information is a matter of public record. At least annually, board members should be required to provide a written acknowledgment of the confidentiality policy and commit to abide by the policy.
  2. Blow the whistle early. There is often a tendency not to address the lack of confidentiality because of the collegiality of board members. When it is first determined that a board member has violated the policy, the issue must be brought to the board chair’s attention. Otherwise, a confidentiality policy is meaningless.
  3. Directly address the matter with the board member. The board chair and/or the governance committee (or similar committee) chair should privately consult with the board member.
  4. Extend grace for the first offense. If the matter can be settled in a private meeting—and the offending board member admits the indiscretion and commits to never repeat the offense—perhaps the matter need not be brought to the full board.
  5. Follow the two strikes rule. In baseball, a batter gets three strikes before they are out. When a board member leaks confidential information and it has been highlighted with the member, the second offense should be the end of the line. Ensure that your bylaws or Board Policies Manual addresses the process for asking a board member to resign for violating your board’s confidentiality policy. Then, if permitted and following appropriate guidelines, ask for the board member’s resignation following the appropriate guidelines.

Few things can destroy the trust of a ministry and its board as quickly as when a board member leaks confidential information. Though this may be the way of life in some corners of the secular world and with governmental officials, this is God’s work, and we are called to a much higher standard.

 

BOARDROOM LESSON
_______________________________

A key responsibility of every board member
is to unequivocally honor the confidentiality
of what is being said in the boardroom,
as well as any non-public information.
There are no exceptions.

  Board Action Steps:

  1. Write: Start with a clear board policy that spells out confidentiality requirements in detail, and include the policy in the Board Policies Manual.[2]
  2. Sign: To serve as an important reminder, the board should sign a confidentiality statement at least annually.
  3. Abide: If any board member is aware of a breach of the confidentiality policy, the board chair should immediately be notified. The board chair should then privately meet with the offending board member to determine if this will be an ongoing pattern or if the board member is willing to abide by the confidentiality policy.

 

Prayer

Lord, help each board member to maintain a protocol
of strict confidentiality concerning what is said in the boardroom,
even if it doesn’t seem that sharing information will cause any harm. Amen.

 

 

[1] Rick Alvis, “Loose Lips Sink the Boardroom Ship,” Lessons From the Nonprofit Boardroom (blog), June 27, 2018, http://nonprofitboardroom.blogspot.com/2018/06/lesson-32-loose-lips-sink-boardroom-ship.html.

[2] Fredric L. Laughlin and Robert C. Andringa, Good Governance for Nonprofits: Developing Principles and Policies for an Effective Board (New York: AMACOM, 2007), 114–15. The authors recommend a Board Members’ Code of Conduct, including confidentiality, be addressed in the board policies manual.
 

From Lessons From the Nonprfit Boardroom: 40 Insights for Better Board Meetings, 2018, www.ECFA.org/KnowledgeCenter.


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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