Nonprofit Board Crisis

Nonprofit Board Conflict of Interest #NonprofitBoards

 

My first instinct after reading the following Washington Free Beacon article: what's the point of being a Foundation President if you can't support what you love?  The short story, while president of the Ben & Jerry's Foundation, Jeff Furman was able to make grants to a nonprofit he founded.  How good or bad is the nonprofit is not an issue in this story.  Neither is conflict of interest which is what the author suggests.  A conflict of interest would indicate that the redirection of funds would somehow benefit this fairly wealthy person.  I don't think so.  And, there are many people on this board who signed-off on the grants.  So, to the Washington Free Beacon we should be grateful for helping us understand what is not a violation of the conflict of interest activities.

Ben & Jerry’s Foundation President Steered Funds to His Own Charity

Alana Goodman • July 1, 2022 4:58 am

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The Ben & Jerry’s Foundation steered more than $100,000 to a charity run by its own president, in the second case of a sitting board member’s nonprofit group benefiting from the foundation’s grants.

Social Ventures Inc., a charity run by Ben & Jerry’s board member Jeff Furman, raked in around $118,000 from the Ben & Jerry’s Foundation between 2016 and 2020, according to financial disclosure records.

During this time, Furman served as president of the Ben & Jerry’s Foundation from 2018 to 2020 and as treasurer in 2016 and 2017. He was also a member of Ben & Jerry’s corporate board and in-house counsel for more than 30 years, according to the foundation’s website.

The funding raises questions about the Ben & Jerry’s Foundation’s financial activities days after the ice cream maker’s high-profile effort to boycott Israel fell apart. The grants are also prompting concerns from ethics watchdogs who say they pose a conflict of interest and could violate laws against self-dealing.

The National Legal and Policy Center, an ethics watchdog group that has been tracking the Ben & Jerry’s Foundation’s spending, told the Washington Free Beacon the funding poses a conflict of interest.

"Unilever should understand they’re dealing with a radical progressive board with apparently huge conflicts of interest with corporate funds that are magically being steered to personal pet projects and nonprofits of board members," said Tom Anderson, the director of the National Legal and Policy Center’s Government Integrity Project.

Federal law prohibits self-dealing, which the IRS defines as the "transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a private foundation." A disqualified person includes "any person who was in a position to exercise substantial influence over the affairs of the applicable tax-exempt organization" during the five years prior to the transaction, according to the IRS.

Social Ventures Inc. says it works to provide "social justice for disadvantaged people," according to its tax discourse records. The Ben & Jerry’s grants made up a substantial portion of Social Ventures’ funding, accounting for one quarter of its revenue in 2020.

Last year, the National Legal and Policy Center filed a complaint with the IRS over the Ben & Jerry’s Foundation’s grants to a different nonprofit group run by another director at the foundation, Anuradha Mittal.

Mittal has been a trustee on the Ben & Jerry’s Foundation board since 2012 and also serves on the independent company board. During this time, the Ben & Jerry’s Foundation gave $195,000 to the Oakland Institute, an anti-Israel nonprofit group run by Mittal that has published columns in support of Hezbollah and Hamas.

Mittal and Furman appear to have a close working relationship. Furman serves on the board of Mittal’s Oakland Institute, and he recruited her to the board of Ben & Jerry’s, according to the New York Post.

Mittal is a leading force behind Ben & Jerry’s decision to halt sales in Israel last July, which anti-Israel activists sought to use as a springboard to pressure other companies to cut economic ties with the Jewish state.

She has posted on Twitter in support of the Boycott, Divestment, and Sanctions movement, praised singer Shakira for canceling a performance in Israel, and defended Rep. Ilhan Omar's (D., Minn.) claim that pro-Israel members of Congress have an "allegiance" to a foreign government.

"Criticism of AIPAC is not anti-Semitic & calling for Congress not to have allegiances to foreign countries (Israel) is not anti-Semitic," Mittal wrote in March 2019, "but targeting the first black Muslim member of Congress with false accusations of antiSemitism IS Islamophobic!"

Unilever, the parent company of Ben & Jerry’s, rejected the ice cream brand’s boycott attempt on Wednesday and said it would resume sales in Israel through a third-party vendor.

"Unilever rejects completely and repudiates unequivocally any form of discrimination or intolerance. Anti-Semitism has no place in any society," Unilever said. "We have never expressed any support for the Boycott Divestment Sanctions (BDS) movement and have no intention of changing that position."

Ben & Jerry’s did not respond to a request for comment.

Nonprofit Board and Prudence #NonprofitBoards

One standard for "good" governance decisions is prudence.  By definition, prudence is the exercise of caution. For the IRS, prudence looks more like a sampling of what others in similar situations would do.

According to the Roys Report and IRS records, the religious-based nonprofit, Samaritan's Purse, prudence may be putting into reserves more than 9 months of operating capital - nearly $1.2 billion.  This is of course a sum to be envied and just maybe, for an organization that spends an average of $700 million a year, an activity of prudence.

In case you don't follow religious-based nonprofit services and again according to the Roys Report, Samaritan's Purse is an offspring of Billy Graham and actually run by his son who along with other family members are on the board.  It is not clear that the family generates income from Samaritan's Purse but history with the Billy Graham enterprises and Liberty University might certainly raise questions and of course, tradition with such board composition (suspicious at minimum by appearance).

But, put "ownership" aside, is a reserve of $1.2 billion ever too much?  More importantly, what is the message to these little old ladies that continue to direct their hard earned savings or Social Security income in this direction.  And yes, it's their choice (just like the folks who continue to support Mr. Trump's PACS despite where they see the money end-up but that is another albeit not that different I would pose, story).

And what might be done about it?  Transparency.  Government oversight.  Standards.  Thanks to The Roys Report, which reports on Church matters, for following and reporting on this story.  

High Impact Board Behaviors #NonprofitBoards

What defines high impact boards can be best understood by member's behaviors according the Harvard Law School Forum on Corporate Governance.

I suggest that this is particularly useful information while trying to understand how to ensure your nonprofit board "achieves".  I have included a summary of the behaviors below but want to suggest that you take a look at the whole release.

From Insights to Action

Almost all boards aspire to be high performing—but few actually measure potential and current directors to assess their ability to create a high performing board.

Russell Reynolds Associates helps place over 1000 corporate directors each year and this work, combined with our board effectiveness consulting, gives us a unique view into hundreds of public and private companies, as well as nonprofit organizations. In addition, the data from our research efforts enables us to identify the attributes of high performing directors. We divide these into two groups of characteristics.

• Foundational or Baseline Attributes: those required to be an effective director and fulfill the responsibilities of the role well
• High Performing Attributes: those that we see among the best directors, and that help set them apart from the rest

While many attributes are important, some stand out as being critical enablers of director success:

Foundational or baseline behaviors of effective directors:

• Prepared and engaged: Comes prepared, is fully present at meetings, avoids distractions and seeks to add value across a range of board topics.
• Current and open: Stays abreast of industry and company developments, is open to new ideas, processes, and ways to solve problems.
• Builds trust and respect: Assumes positive intent and builds the trust and respect of fellow directors and management.
• Knows their role: Understands the role of a director and avoids crossing the line into management.
• Stakeholder and investor savvy: Effectively understands institutional investor and other key stakeholder concerns and how to think about maximizing shareholder returns.

High performing director attributes:

• Sound judgment and relevant expertise: Applies the relevant, current business expertise and insights to the situation at hand and demonstrates sound business and situational judgment.
• Constructive engagement: Listens more than talks, willing to constructively engage with and challenge management and peers when appropriate.
• Integrity and courage: Acts with integrity and possesses the courage to do the right thing for the right reasons.
• Focus and questions: Asks the right questions appropriate to the situation and focuses on the key issues relevant to the discussion and business.
• Possesses an independent perspective: Avoids groupthink and prioritizes the interests of the company’s shareholders and stakeholders.

To build a highly effective board that successfully adds value to the company in the way strong directors desire to, it is important boards use these insights—tailored as necessary to their unique context—in both the recruitment of directors, and their regular evaluation of director performance.

 

Value-Driven Nonprofit Advocacy #NonprofitBoards

Throughout the history of nonprofits in the US there have certainly been periods of times when some took a position on a social matter.  There are of course rules as to just how much of a nonprofit's budget can be sent on taking a position, particularly what is deemed "political" but in reality this means that it is staff time that must be watched, not volunteer or board time.  So we have come to the present with SO many events happening around everyone that catalyzing the board to do and say something about events can't be avoided or perhaps shouldn't be avoided all dependent and based on a nonprofit's core values.  Essentially, if a board has declared a set of fundamental "beliefs" aka values, that board should be bound to take action.  Not so easy or clear I understand but if not now when? But first, the board members must converse with each other, beginning with a reminder about what are their values.  All that said, here's a good instructional piece to provide options for action.

From Associations Now:

LEADERSHIP

How to Engage Boards on Hot-Button Topics

According to two association leaders, CEOs need to engage boards on social issue challenges. And they can do it without things getting messy.

By Mark Athitakis Jun 26, 2022

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Since the start of the pandemic, nonprofit boards have been busier than ever—more meetings, more Zoom calls. But despite all that conversation, boards can still struggle to determine their proper role. That’s especially true as pressure to take on social issues has increased. According to a recent “Future of the Boardroom” survey by the National Association of Corporate Directors, 30 percent of board members say that “CEOs staying silent on social issues” will be less acceptable in the future.

In that environment, boards play a role in ensuring that the organization’s broader goals are established. “It’s the board’s responsibility to steer the company to think longer term,” said NACD Board Chair Sue Cole. “The CEO is in the heat of everything, and has to be very responsive to things that come along. The board can serve as the lens to refocus a little bit on longer-term purpose.”

But that’s not to say that boards don’t have a role in conversations about hot-button topics. Indeed, that’s a conversation CEOs should intentionally encourage, says NACD CEO Peter Gleason, because it’s a conversation about stakeholders—customers, members, and staff. “CEOs are the ones who’ll get asked these questions, but the expectations aren’t just from their shareholder base,” he said. “These are very challenging issues that can put you in very dire straits should you not approach it appropriately.”

So, how do you approach it appropriately? As CEO, Gleason sees his role as leading conversations that push board members out of their bubbles and out of their comfort zones, not giving predetermined answers but launching debate. For any such topic, he says, “my job preparing the directors for that discussion was to gather a variety of viewpoints on the issue and send them multiple readings that they had to dig into,” he said. “Directors always come with their own perspectives around an issue: What they’ve learned from other boards that they serve on, their own reading. But people home in on their favorite source for those things. So they read the same materials over and over and over again.”

You’ve got a lot of well-intended people who want to do the right thing, but they need the tools and the up-to-date thinking to do it.

Sue Cole, NACD

But just as important as helping board members get up to speed on a particular issue, Cole and Gleason say, is making sure that boards have the preparation to think flexibly and strategically. NACD’s Future of the Boardroom survey asked directors about the changes to American boardrooms they anticipate in the next three years, and the biggest ones involve rethinking how they go about their work: Integrating ESG metrics alongside financial ones, doing more with data, spending more time on board work itself, and holding underperforming board members accountable. 

NACD, for its part, has been formalizing orientation around the skills that board members need: In 2020, it launched a certification program for corporate directors that covers the essentials of board work and helps them keep up with regulatory changes that relate to governance. The program is meant to address a problem as pronounced in the association world as the corporate one—people who want to be board leaders without much guidance in what the job requires. “You’ve got a lot of well-intended people who want to do the right thing, but they need the tools and the up-to-date thinking to do it,” Cole said.

But whether the training is done through a formal certification or orientation program, Gleason said the goal should be to train volunteer leaders in how to work as a board, not school them in every operational challenge that arises. “It seems like over the last three or four years, every critical issue like cybersecurity demands that you have to have an expert on it on your board,” he said. “That’s not a viable solution.”

What do you do to prepare your board for conversations around difficult topics? Share your experiences in the comments.

(PAUL CAMPBELL/ISTOCK/GETTY IMAGES PLUS)

By Mark Athitakis

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Mark Athitakis, a contributing editor for Associations Now, has written on nonprofits, the arts, and leadership for a variety of publications. He is a coauthor of The Dumbest Moments in Business History and hopes you never qualify for the sequel. MORE

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When Nonprofit Presidents Are Removed #NonprofitBoards

There is not a huge amount of detail in the following article, but for sure, two college presidents in California have been unceremoniously removed from their positions by their boards of trustees.  There of course could be any number of valid and possible invalid reasons for the dismissals but the issue for me is not the cause as much as the effect - on the stakeholders that is: students, faculty, alumni, parents. 

Discharging the senior most paid individual in an institution is totally the purview of the Board.  There are most often good reasons often having to do with either a failure to achieve goals (program and/or financial) or misbehavior effectively not acting within the principles and values of the organization.  I of course know nothing of the circumstance (although I am often recruited to discern these very issues).  But more important here is not the act of dismissal but what appears to be the failed act of transparent communication (within of course the rules of privacy).  It appears that both boards have been seriously covert in revealing the "what happened" and the consequence is of course apparent. 

The lesson: when a board takes these actions, communication with constituents is critical - possibly even involving constituents in the process of discernment (yes, this is a thing and quite doable).  So, assuming the boards did what they were supposed to do in understanding the "why" for dismissal, communicating with all stakeholders appears to not have been done so effectively.

A lesson for all those board who find themselves in a similar position.

 

From Inside Higher Ed:

2 Community College Presidents Ousted, Despite Campus Support

By 

Nick Hazelrigg

 

June 13, 2019

 

Two community college presidents in California have been either placed on leave or terminated in the last two weeks without reason given by the governing boards. In both instances, the presidents were highly popular, leaving students and faculty members confused or angry. In both cases, the presidents were removed by boards that oversee multiple campuses in a system.

With more questions than answers, Katrina VanderWoude, Contra Costa College president, was placed on investigative leave on May 31. Norco College president Bryan Reece was placed on leave and then terminated in a late-night meeting of the Riverside Community College District board on June 12. No reason has been given by the governing boards in either instance.

Often when college presidents are removed, it’s preceded by tension with the stakeholders at the college. In both the cases of VanderWoude and Reece, campus leaders condemned the leaders’ removal.

At the meeting where the Riverside Community College District board voted to remove Reece, several students and faculty from Norco College arrived to speak on Reece’s behalf and implore the board not to have him removed, yet the board of trustees voted 4 to 0 to remove him anyway.

“The Board of Trustees and district leadership are committed to ensuring that the faculty, staff, students and managers are fully supported,” Riverside Community College District chancellor Wolde-Ab Isaac said in an emailed statement. “We hope we can count on your understanding and patience during this challenging period.”

One student protesting at Tuesday night’s meeting was Autumn Uriostegui, student body president at Norco. She said the board’s decision to terminate Reece despite the protest was upsetting.

“It’s so frustrating,” Uriostegui said. “I reached out to over 100 community members last night to either come speak at the meeting or send letters, and everyone who spoke from our community was in support of Dr. Reece. They think he’s done a great job for our community and done such an amazing job as president helping inclusivity, which not many presidents have done in the past.”

Uriostegui said Reece’s tenure was unique in the sense that he reached out to many groups at Norco. Uriostegui also said it's common belief that Reece’s problems with the board were the result of Isaac’s preference for Riverside Community College over the other two colleges in the district, Norco and Moreno Valley.

“It’s clear [Isaac] doesn’t support Norco and Moreno Valley,” Uriostegui said. “So many programs we’ve tried to get are already at Riverside. They’re doing this because they don’t like that Dr. Reece was trying to put Norco on the map.”

Several faculty members also spoke in support of Reece, and a petition for the college to retain him gained 700 signatures before the meeting.

"Without student knowledge, the Board of Trustees made a decision to place our president on immediate administrative leave," the petition read. "[The board meeting] is our opportunity to have our voices heard and matter."

Meanwhile, at Contra Costa, VanderWoude’s fate remains unknown.

Timothy Leong, Contra Costa spokesman, said there are no updates to be given in VanderWoude’s investigation but that more information will become available later in the month. The college and chancellor have declined to offer any more information, saying the issue is a personnel matter.

Rumors have swirled about the reason behind the investigation. According to Fox KTVU in California, the African American Staff Association held a press conference condemning the investigation and called it a “sham.” VanderWoude, who is African American, has been a proponent of diversity efforts during her tenure.

One Contra Costa faculty member, Manu AmPim, told KTVU that there were concerns the investigation was not undertaking a fair process. The NAACP is now investigating the situation.

Read more by 

Nick Hazelrigg

If Board Members Are Wondering #NonprofitBoards

In case your nonprofit board members or even staff are unclear as to what precisely Juneteenth is about, this Governing Magazine piece tells the story.

The Surprising Local Origin Story of Juneteenth

Now a federal holiday, its roots are based in local, grass-roots celebrations dating back to the Civil War. Once nearly forgotten, the rebirth of Juneteenth speaks to America’s ongoing struggle for racial equality.

June 17, 2022 • 

 

Emma Newcombe

On June 19, 1865, Union Army Major General Gordon Granger arrived in Galveston, Texas, and announced that the 250,000 enslaved people in the state were free. The Civil War had actually ended two months before Granger’s arrival, and enslaved men and women in the Confederacy were legally freed by the Emancipation Proclamation, which was enacted two years earlier.

But word of the proclamation during the war traveled slowly, especially in a remote state like Texas. Many slaveowners simply defied the proclamation, forcing thousands of enslaved people into continual bondage. But on that June day in 1865, the reality that slavery had ended officially reached what had been the westernmost state in the Confederacy.

For over 150 years, Juneteenth – also known as Liberation Day, Emancipation Day or Jubilee Day – has been celebrated by Black men and women in Texas since Granger’s proclamation. Former slaves within the state developed grassroots-level commemorations and celebrated throughout the 19th century by hosting religious services, reciting the Emancipation Proclamation, and singing songs and hymns. Some Juneteenth events were overtly political, as organizers held events to teach Black citizens about their newfound voting rights. But the celebrations were also festive, social gatherings: people would play games, share food and drink, and attend rodeos and dances. Towns and cities held ornate parades replete with floats representing the ideals of liberty and freedom.

 

Some white Texans sought to suppress these celebrations, as Juneteenth countered the Southern Lost Cause narrative that romanticized slaveholding culture and the Confederacy. They employed segregationist laws to prevent Black locals from hosting celebrations in state parks and other public spaces.

 

A portion of the original General Order No. 3, read by Union Army Major-General Gorgon Granger to the people of Galveston, Texas. The order reads, in part, that “The people are informed that, in accordance with a proclamation from the Executive of the United States, all slaves are free. This involves an absolute equality of personal rights and of property, between former masters and slaves, and the connection heretofore existing between them, becomes that between employer and hired labor.” (National Archives)

In response, people simply held Juneteenth events elsewhere, often alongside the banks of local rivers and lakes. Over time, Black community leaders purchased land specifically for celebrating events like Juneteenth. For example, in 1872, activists in Texas raised $1,000 to purchase land in Houston and created Emancipation Park, a space devoted to holding Juneteenth celebrations. Black leaders took similar action by purchasing land to create Booker T. Washington Park in Mexia and Emancipation Park in Austin.

During World War I, thousands of Black Texans began moving north and west to find industrial jobs and escape the segregationist laws and economic difficulties plaguing them in the South. This period became known as the Great Migration, with Black people taking the Juneteenth holiday with them to cities across the country.

By the 1920s, the now nationally known holiday had become increasingly commercialized and associated with mass entertainment. Department stores sold festive outfits specifically for Juneteenth, and commemorative carnivals held countless rides and games. But these celebrations slowly receded by World War II, in part because Black Americans became disillusioned by continued inequalities and were less inclined to celebrate their holiday.
Juneteenth saw its greatest revival after Martin Luther King Jr.’s assassination in 1968, when his widow Coretta Scott King and friend Rev. Ralph Abernathy held a rally for the Poor People’s March in Washington on June 19. King and Abernathy encouraged civil rights leaders to celebrate Juneteenth in their communities as a way to champion Black identity and equality. This, along with the rise of the Black Power movement, led to an expansion of Juneteenth celebrations throughout the 1970s.

By the late 1970s, Texas became the first state to make June 19 an official state holiday, although they simultaneously recommitted to celebrating Jan. 19 as Confederate Heroes Day. Dozens of other states eventually declared Juneteenth a state holiday, and various figures advocated for the federal government to nationalize the holiday.

This advocacy reached a crescendo in 2020, when Juneteenth celebrations included protests for police reform, particularly after the death of former Texas resident George Floyd. The following year, the federal government made the date the newest national holiday.

June 19, 1865 did not, of course, lead to immediate equality for Black Americans, and the 2020 protests demonstrate that social justice remains an unfulfilled ideal for many. The unique ways that the holiday has been celebrated over time, as well as the varied iterations of the holiday at the local, state and national level, reflect the evolving meanings of freedom and equality in America.

Nonprofit Board Member Philosophies for Practice #NonprofitBoards

A recently released Fast Company article caught my eye about board members and their behaviors.  I appreciated in particular the author's offering the following philosophies that board members should embrace:

1. Bring a landscape mindset. Provide an “eye on the horizon” perspective: macroeconomics, trends from the marketplace, competitive insight. Provide a view that operators might be missing.

2. Bring an advisor mindset. Ask yourself: How can I observe and listen, and engage in pattern recognition? Provide proactive and empathetic advising based on your observations.

3. Bring a fiduciary mindset. Ensure the organization is leveraging best practices; ask the hard (but also the most helpful) questions after careful scrutiny of the company’s financials; come from a “default alive” perspective; help ensure adherence to GAAP, applicable statutes and laws, etc.; and pay attention to and approve an annual audit.

In this article there's additional thoughtfulness about boards and their members.

Nonprofit Board Secretary #NonprofitBoards

As I have and continue to like and serve on boards in the Secretary role, I am always appreciative of finding articles that speak to this role.  Of course I myself have created a few articles on this topic (you can find browsing through the topic search on this blog or at my website) but the following gives a nice spin on the duties and more importantly the characteristics of those of us who have been willing to take on this position.

GOVERNANCE What Makes a Great Company Secretary?

PUBLISHED: JUNE 14, 2022
READ TIME: 6 MINUTES

What Makes a Great Company Secretary?

At one of our recent webinars on the Role of the Company Secretary, Kristy Huxtable, Head of Company Secretariat at Australian Retirement Trust, shared insights from her experiences in the role. We’ve gathered together some key points from the webinar into a brief article to assist those donning the Company Secretary hat.

A boardroom can be an intimidating setting. For it to be less so, each person involved in an NFP’s management and its board should understand the intricacies of their given role. In this article we’ll explore one important, but often misunderstood, position: that of the Company Secretary (CoSec) — AKA, the Chief Governance Officer.

Because they’re privy to confidential information and have access to its most senior executives, a CoSec has a bird’s eye view of an organisation. They’re the sole liaison between management and board members. Yet, their significance can be underestimated.

Characteristics of an effective company secretary

It’s critical for the CoSec role to be a good fit for whomever takes it on, given the potentially high stakes and lofty responsibilities. Kristy outlined a wide range of personal attributes that are helpful for CoSecs to possess, including many soft skills. The following are her top three ‘non-negotiables’:

• Confidence: Anyone who’s called upon to speak in front of decision-makers will ideally possess eloquence and poise. The same should be true of the person in a secretarial role at an NFP because they often need to provide conclusions and opinions, in addition to relaying minutes and reports. “When you’re only dealing with executives, you might be quite familiar [with how to speak to them], but when you deal with a board, there’s often quite a different way to present.” Kristy explains. Communicating confidently — and respectfully — is a must for CoSecs who want to make an impact.

• Sound judgement: Maintaining an air of confidence requires objectivity, which can be tough to achieve when there are a lot of hands in the pot. As the “gatekeeper” of knowledge, you should be ready to dig into your archives, interpret data and reports, and advise your peers based on the organisation’s goals, rather than your own curiosities or frustrations. “An executive or a member of management might use you as their counsel,” says Kristy. “And it might be a decision where you need to think about whether it’s the devil or the angel on your shoulder.”

• Tenacity: When you’re responsible for documenting every bit of information about an organisation and its people, you’re the first to notice when issues arise. Being brave enough to bring them to the forefront can save the organisation’s money, time, and reputation — facets that are even more precious for NFPs than for traditional for-profit businesses. This goes hand-in-hand with resilience, which generally only develops with time and through hardship. Kristy remembers becoming a bulletproof CoSec when she had to run the Commonwealth Bank’s annual general meeting of about 1,000 shareholders from her lounge room when restrictions were enforced during the recent pandemic. Whether you’re intentionally tenacious or build your capacity for courage over the years, it will serve you in becoming the type of recordkeeper any organisation would want.

The nitty-gritty of wearing the liaison hat

Possessing traits that are compatible with the role is one thing; applying them strategically is another. The CoSec’s job revolves around liability and compliance. Performing due diligence regarding the legalities and public nature of NFP operations is vital.

Kristy works in finance, an industry with specific and ample regulations. Staying briefed on directors' requirements helps a CoSec to offer accurate advice. “If you don’t fully understand the obligations — and compliance obligations — to a particular director, then you’re not operating in that trusted advisor capacity that a board looks to you to be.” Keeping an eye on cultural trends and each department of the business is also key. A board may not understand why management chose to pivot on a particular initiative, for example. They’ll look to the CoSec to deliver a full picture of what impacted that decision, both internally and externally. Or, there might be some personal challenges impacting certain leaders, and it’s the secretary’s job to discreetly and professionally communicate about what’s holding things up. As Kristy points out, a CoSec gets an “umbrella view.”

“We have access to some of the most senior people, but we also need to have that situational awareness — that peripheral vision — of being able to review and consider where challenges might be across different parts of the business,” she says.

How to add value in the boardroom

As a CoSec gets more comfortable, the role becomes less about compliance and more about bringing value to every meeting. Here are Kristy’s top tips for showing up with purpose:

• Know stakeholders and their needs. Understanding what people are after facilitates better and more thorough support. An NFP’s mission is greater than the needs of any individual, but it is beneficial to think about each category of stakeholders as an avatar with a unique aim.

• Be solutions-focused. As an officer, the secretary should look for opportunities to lead. Kristy suggests anticipating the issues that may be discussed and coming prepared with potential solutions. This readiness demonstrates your value to the entire team.

• Use consistent processes. Whether writing a board paper or following protocol for document security, always executing on duties the same way will make a CoSec a reliable member of the team.

• Maintain transparency. People appreciate radical truthfulness. However, it’s imperative to avoid giving too much away when you’re acting as the “conscience” of the organisation. A great CoSec balances honesty with confidentiality by asking if the information they’re about to share is supportive of their job and helpful to stakeholders.

A three-pronged input model

To hone in on her contributions to a board meeting, Kristy evaluates the same three questions she uses to guide her board papers: ‘What,’ ‘So what,’ and ‘What now?'

1. What? This is the data stage. Having the figures on hand can initially help your audience understand why they should care about a business trend, revenue pattern, or proposal.

2. So what? Next, a board will expect to dive into forecasts and acknowledge the organisation’s risk appetite. This phase is about relevant interpretation.

3. What now? Here’s the most important part. Share opportunities for moving forward, in reference to the specs you’ve already mentioned.

What if you don’t have an answer for one or more of the above? Call it out, Kristy says, and put forth a timeline for when you expect to know more.

Taking pride in being a CoSec

Twenty-two years of working in a secretarial capacity has given Kristy a unique perspective on the role, and she acknowledges that not every organisation will welcome a CoSec’s heavy involvement in advisory processes. “I do know that not every CoSec role is in a position where it’s elevated, it’s got the importance or the significance that we feel the role needs and I strongly feel it needs,” she says. “But it does take bravery to make sure that those issues are on the table.”

If you’re currently a CoSec or looking to become one, it’s essential to find an NFP whose values align with yours and stay open to feedback. Growth is not linear — especially in the oft-misunderstood board environment.

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– This article was based on a webinar featuring Kristy Huxtable, Head of Company Secretariat at Australian Retirement Trust.

Board Diversity Matters #NonprofitBoards

While the tides are turning very slowly in moving nonprofit boards to diversify their composition (i.e. who sits at the table), a recently released study by Boston University illustrates the impact of boards that lack diversity, particularly given the nature of these board's work.  Local land boards in Massachusetts have a lot to say about what happens in their geography related to what gets built.  The study notes in particular that the folks sitting on these boards are radically not representative of those who are most affected by the board's decisions.  A truly valuable lesson in how the lack of diversity and constituents in governance composition matters on the outcomes.

BU study finds local land boards dominated by homeowners in Massachusetts

 

June 15, 2022

• Simón Rios

Local boards that oversee land use and housing construction in Massachusetts are dominated by white male homeowners, potentially skewing their decisions, according to a Boston University study of nearly two dozen cities released Wednesday.

Boston University researchers found roughly two-thirds of members were homeowners, even though most of the voters in the communities were renters. The researchers examined zoning, planning and other boards in 22 cities across the state.

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Political science professor Katherine Levine Einstein said the difference matters because homeowners might be less willing to approve plans for new apartments and condos in order to protect the value of existing homes.

"The underrepresentation of renters means that those concerns about rising housing costs may not be fully represented on these boards," said the BU professor.

In the long run, Einstein added, that disparity could be a factor driving up housing prices and making it harder for renters to buy a place of their own.

The study also found that people of color and renters are often underrepresented in municipal surveys about land use. For instance, BU researchers found homeowners make up 54% of Newton voters, but 93% of the people who participated in a city poll on local development.

Einstein said municipalities need to be "deliberate about inclusivity" when they conduct surveys.

At this point, BU researchers concluded, the voices of people who would most benefit from new housing are "almost entirely absent" from the government's decision-making process.

David J. Harris, former head of the Charles Hamilton Houston Institute for Race and Justice at Harvard Law School, said the BU study highlights one of the ways segregation and inequality are woven into even pedestrian issues, like zoning decisions.

"These seemingly minor events constitute yet another form of exclusion, at once discriminatory and an exacerbation of past exclusionary practices," Harris said in an email.

Separately, a forthcoming report in Milton also faults that city's lack of diversity in local government.

"Those serving the town and representing its institutions, in the aggregate, do not reflect the diversity of the town itself," according to a draft copy of a report by a commission established in the aftermath of the killing of Minneapolis resident George Floyd. The commission found a lack of diversity in elected officials, town boards and municipal employees.

The report also found the level of affordable housing in Milton fell far short of state guidelines.

Nonprofit Board President & Others Resign #NonprofitBoards

As many nonprofit board members and execs have learned, the so-called partnership between the two entities is not one which is always smooth or even positive.  Take for instance the case of the Mexic-Arte Museum.  The board received multiple complaints from staff and an investigation was conducted by a third party (like the kind I am recruited to conduct I assume).  And the board ventured forth to make changes based on the investigation.  But for reasons alluded to in the article, all did not end well.  And now there have been resignations and a new chapter must begin.  Let's hope the renewed beginning, likely with a third party, can focus first on the relationship between the board and exec. 

Mexic-Arte Museum’s Board President and Four Other Board Members Resign

by Jessica Fuentes June 14, 2022

 

In a letter dated June 9, 2022, Michael Torres, the President of the Board of Directors of the Mexic-Arte Museum, resigned. That same week, four other Board members resigned, leaving 15 members helming the organization. 

In his resignation letter (which is included in full at the end of this story), Mr. Torres, who has served on the board since 2011 and as President since 2018, referenced several allegations made by current and former staff against the museum’s Executive Director, Sylvia Orozco. Specifically, he cited the staff’s concern around an unsafe workplace, as well as improper care of the institution’s art collection. Last week, the Board made a public statement addressing some of the concerns raised by staff. In it, they said that, “Though these concerns had not been brought to the Board of Directors directly, the entire Board takes the concerns of our current and former employees seriously….”

Mr. Torres’ letter also laid out specific action steps that have been taken by the Board, which were not described in detail in the organization’s previous public statement. According to Mr. Torres, “The Executive Committee heard these concerns, and then came together hiring outside professionals in Crisis Management with experience in PR, HR, and Legal. Working with the Crisis professionals, the Executive Committee commenced an investigation and drafted a series of Recommendations to resolve the issues including organizational changes, an HR Audit, and building and safety remediation, and others.”

Mr. Torres goes on to explain that despite these actions, the board has met resistance from Ms. Orozco and another unnamed board member. In the letter, he also states specifically that “during the June 6th Board meeting, many of us were told that we could not ask questions or make a statement at the Board meeting. Nor would we be allowed to call a Board meeting to address the contents of our investigational findings.” 

A statement that Ms. Orozco provided to Glasstire indicates that during the board meeting, “all Board Members asked questions, gave input and statements and the Board Secretary [Nick Barriero] documented numerous questions asked by multiple board members.” 

Additionally, Mr. Torres explained to Glasstire that though he served in the role of President of the Board, the Mexic-Arte’s bylaws “don’t allow for the President to call a board meeting. Either the Executive Director can, or a majority of the board, or a majority of the Executive Committee.” While Ms. Orozco has told Glasstire that this statement is untrue, the institution’s current bylaws, which were provided by Mexic-Arte and reviewed by Glasstire’s staff, indicate that Mr. Torres is correct in that the Board President, alone, cannot call a meeting. According to Ms. Orozco, the organization is currently in the process of updating its bylaws. 

Mr. Torres also indicated to Glasstire that in his experience, Ms. Orozco holds a position of authority on the board that is more akin to a Chairman of the Board (or President) than an Executive Director. This is atypical for nonprofit boards. As explained by CharityLawyer, a blog which provides simplified explanations of nonprofit law: “The Board of Directors is the collective boss of the CEO/Executive Director… [and] is responsible for the governance of the non-profit, which implies final meta-level and long-term oversight and responsibility for finance, programs, and legal compliance.” 

George T. Elliman, who served as Board President prior to Mr. Torres, also resigned, effective June 10, 2022. Mr. Elliman began his resignation letter, provided to Glasstire, with a clear and unequivocal statement: “I love Mexic-Arte Museum and all that it stands for and respect greatly all that it does for the whole community.” 

Mr. Torres echoed these sentiments when he spoke to Glasstire, saying “All of us love the museum. I love the museum. I love Sylvia. I love the artists… the community and all of us together need to mend and bring this back together… Let’s make the necessary organizational changes and let’s be prepared for growth. It’s the destiny of the community to prosper.”

To this point, Mr. Torres told Glasstire about the institution’s need for more support positions to take on some of the responsibilities Ms. Orozco has shouldered since founding Mexic-Arte nearly forty years ago. According to the Mexic-Arte website, other than the roles of Executive Director (held by Ms. Orozco) and Curator of Exhibitions and Director of Programs (held by Isabel Alexander Servantez III), no other position titles include the words director or manager. Instead, most other positions are listed as “associate,” which gives the perception of a flat organizational structure.

Following the current and former staff’s allegations on social media, Mexic-Arte hired Red Fan Communications to provide guidance on how to address staff concerns. While Red Fan assisted with crafting the Board’s public response last week and also set up an email address to provide current and former staff a direct line to raise concerns, ultimately the company decided to stop working with the museum. Although the museum has publicized this email address (hearingyou@mexic-artemuseum.org), a recent message Glasstire sent to the account seemed to bounce back. 

Current board members and Ms. Orozco told Glasstire that they felt Red Fan had not created a clear plan to help them move forward, and that there were communication issues between the firm and the organization. Specifically, the concern was that Red Fan was not relaying some information directly to Ms. Orozco, who select board members felt should have been the point of contact. Rather, Red Fan was primarily in conversation with the now former board President, Mr. Torres, and other board members.

Kathleen Lucente, CEO of Red Fan, told Glasstire, “We are no longer working with the museum. We are big believers in the mission of the museum and I’m excited to see what happens next… I sign up to work with companies where I know that we can really make a difference and in this case I felt like we were not going to be able to move things forward at the pace that we are used to moving things forward.”

Kim Wilson Vincent, who has served on the museum’s board for over ten years and currently remains on the board, explained that it is important for Mexic-Arte to work with a PR firm moving forward, “but the correct firm that will work directly with the Director.” 

While Ms. Orozco agrees that the organization would benefit from a dedicated PR firm and a revamping of its HR policies, she maintains that over the years Mexic-Arte has been a training ground for many museum professionals who have gone on to serve in larger institutions across the U.S. She also stated that the issues related to the museum’s current building have been long-standing and are due in part to the historically inequitable funding of Latino and African American cultural institutions. 

Ms. Orozco also pointed to the delays in moving forward with plans for a new building, as a bond was approved to support much of the cost of a new space back in 2018, but the contract with the architects was just signed last month. The building’s needs have been publicized before, as the Austin magazine Sightlines reported in 2018: “The upper two floors are off-limits due to structural issues, the lighting and HVAC systems are woefully outdated, and asbestos abatement is needed before any renovation work can begin. The brick building’s foundation is badly deteriorated.”

Along with the resignations of Mr. Torres and Mr. Elliman, other board members who recently resigned include Neil Diaz, Teresa Miller, and Mike Taylor. Losing these five board members constitutes one-fourth of the museum’s board, which now comprises 15 people. 

Michael Torres’s Letter of Resignation (click to enlarge)