Seven Times When a Board Member Should Bid Adieu

Board service is for a season—but it is not forever!

 

by Dan Busby and John Pearson

 

Wise people know when to quit.[1]

Dr. Henry Cloud

 

Board service is some of the most rewarding work that you can ever do. And nearly every individual joins a board with hopes and dreams to make a difference. But even in the best of board service situations—it is not forever. And this is true even if the board on which you serve has no term limits.

Board members generally finish their terms with a sense of accomplishment. Some even lament when the time comes to leave a board. But there are times when a board member should leave a board—even mid-term. 

While there are many situations when a board member should simply make a graceful exit from a board, we will only focus on seven of these opportunities:

  1. Your passion for the board work has waned. When your passion to serve on the board has left the building, it is time to step off the board. Indicators of loss of passion are lack of faithful board meeting attendance, failure to prepare for board meetings, inattention during board meetings, and more.

If you are on a board with no term limits, the loss of passion could relate to how many years you have served on the board or perhaps your age. Or, board members can lose their passion by becoming too busy with other priorities to effectively serve.

Remember, no passion equals low board service. Low board service equals board room doldrums.

  1. You joined the board for the wrong reason.  If you joined a ministry board with the thought of expanding or increasing your business or building your resumé, you are not the first board member to do so. Perhaps you simply thought it would be prestigious to be a member of a certain ministry board. 

Joining the board for the wrong reason is one thing—staying on a board after you realize that your motives were improper is something else. Quickly find an exit ramp!

  1. You determine that the board significantly lacks independence. Once upon life’s way, I accepted the invitation to join a certain national board of a significant ministry. I was enthusiastic about the opportunity to serve.

After a couple of meetings, it became obvious to me that I did not fit on the board. My first clue was that board meetings were only scheduled about 60 days in advance. Then I discerned that the board was comprised of the president/founder of the ministry and several of his “cronies.” Along with the president’s friends, I was just expected to rubber stamp his recommendations. They really didn’t want my input—they were just borrowing my name and influence. I waited a year—should have waited less—and bid them goodbye. It was a decision I have never regretted.

  1. You have significant potential conflicts of interest.  When you began your board service, you did not have any relationships that were a potential conflict relating to your board service. But now, the ministry is investing several millions of dollars through the investment firm where you are a broker. 

You were recused from the meeting when the board approved using your firm—plus the brokerage fees were competitive. Another broker is handling the account and you do not receive any direct benefit from the account. But your brokerage firm clearly benefits from the relationship.

While the board is not bringing pressure on you to resign, in today’s social media world, it would be easy for your ministry to be criticized for the decision to use your brokerage firm. A resignation of your board membership is probably the better part of valor.

  1. The ministry is not conscientious about obeying the law. The CEO and the ministry leadership team are comfortable with the legal compliance issues. Still it is clear that the ministry is not providing adequate accountability for funds expended internationally. Representatives of the ministry are carrying cash of over $10,000 per trip out of the U.S. to provide funding for certain fields while not reporting the movement of the cash. In addition, the ministry is not meeting the charitable solicitation registration requirements in any of the applicable states.

You have politely raised concerns about the legal compliance in the last two meetings, but none of the other board members share your concern. And the CEO and leadership team do not believe there is an issue. Their approach is “Let’s wait to see if we get caught and then we will fix it.”

In a last effort to highlight your concerns, you have a meeting with the board chair and the ministry’s president. Still sensing there is not a heart to do what is right—and legal—you politely resign and wish them God’s best.

  1. Not rowing in the same direction. Vigorous debate is a mark of a strong board. Even seasoned ministry board members do not always agree with one another. However, after the debate is over and a decision has been made, everyone must row in the same direction—this means speaking with one voice.

Once in a while a particular board member will be unable to support a decision made by the majority of the board members. This is a signal that it is time for the out-of-sync member to step off the board.

Not rowing in the same direction often results in a board member feeling he or she doesn’t have an effective voice:

  • Direction of the ministry. It may become patently obvious to a board member that the ministry is headed in a strategic direction that the board member cannot support.

  • Conflicts between board members. Friction between one board member and another board member can take all of the fun out of serving on a board—even if you aren’t personally in the line of fire. 

  • Conflicts between a board member and the CEO. Sometimes there is such a fundamental divide between a board member and the CEO that board service becomes untenable.

If you are serving as the lone dissenting board member—dissenting about the ministry’s direction—or in conflict with other board members or the CEO, your service has effectively ended. Take the right step and resign.

  1. The ministry is in dire financial straits. When a ministry is not doing well financially, board members can feel various levels of dis-ease. No board member wants to have their name associated with a ministry that is going under.

There is a big difference between a “financial rough spot” and dire financial straits:

  • Financial hard times could be a run of several years of unrestricted expenses over revenue but the ministry still has some cash reserves—although the reserves are becoming more modest. 

  • Dire financial straits might be when the “B” word is mentioned—bankruptcy.

Dire financial straits may lead to the ministry being no longer willing or able to provide Directors’ and Officers’ (D&O) liability insurance coverage for board members—most directors do not want to continue serving if the ministry is no longer able to provide the protection board members expect.

During financial hard times, board members, with God’s help, look for ways to get finances back on track—by either increasing revenue or reducing expenses, or both. During a time of dire financial straits, board members often look for the door.

Before offering a formal resignation, raise your concerns to the board chair. It’s possible that the rest of the board isn’t aware of the concerns. Perhaps other board members may have some of the same concerns and your voicing them at the time of your resignation may bring those concerns out in the open, providing an opportunity for the board to discuss and resolve them.

 

BOARDROOM LESSON
_______________________________

Board service is for a season—but it is not forever!
A board chair should help board members determine
when their season of service is reaching an end.

  Board Action Steps:

  1. Review: At least annually, each board member should self-assess their board service.

  2. Determine: On a scale of 1-10 (10 is high), what is my passion for continued board service?

  3. Take Action: If my passion is waning for board service, is it time to consider stepping off the board? Learn why Dr. Henry Cloud writes, “Wise people know when to quit.” Read Necessary Endings: The Employees, Businesses, and Relationships That All of Us Have to Give Up in Order to Move Forward by Dr. Henry Cloud (New York: HarperBusiness, 2010).

 

Prayer

Lord, help me discern when my time on the board is over.
Allow me to finish my service well. Amen.

 


[1] Dr. Henry Cloud, Necessary Endings: The Employees, Businesses, and Relationships That All of Us Have to Give Up in Order to Move Forward (New York: HarperBusiness, 2010), 26.
 

From More Lessons From the Nonprofit Boardroom: Effectiveness, Excellence, Elephants!, 2019, 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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