Rick Cohen, in his NPQ Nonprofit Newswire of March 22, perfectly lays out a set of do's and don'ts (some which should be "duhs" for nonprofit boards) following his review of a really badly behaved board of an inner city hospital:
Boards shouldn't be comprised by too many of the friends and colleagues of the CEO [this probably and justifiably raises the question about what role the CEO should have in recruiting board members]; nonprofits should limit how much business they do with board members as vendors [I'm thinking there's too much potential conflict of interest to have any vendors seated]; nonprofits (this should be nonprofit board members) should vet the ethics and behavior of potential board members so that they don't end up with crooks in their midst (you think?); if board members become rubber stamps for the CEO, they aren't functioning and should be replaced (but who would replace them?); and when a board learns of the likelihood of potentially criminal behavior on the part of the CEO, it's time to act. (for sure!)
By the way, do click this link to Rick's case -- it's a real hoot!