The recent governance headlines concerning the fallout from the inability of Penn State’s board to govern have focused on what the board knew or didn’t know and the lack of a process to assess and manage risk. As always, there is a great temptation in our culture to serve as judge, juror and key consultant to those who have stumbled and failed. Numerous articles, speeches, panel discussions and webinars from key thought leaders in the field of board governance continue to discuss what went wrong and what should be done to ensure that the same incident could not happen again.
Don’t get me wrong, the dialogue is welcomed and I believe will lead to a revolution of ideas that will have a massive impact on best practices acutely needed in today’s nonprofit boardrooms. However there is another discussion that is missing from the dialogue and that is the answer to the question that everyone in a public or private boardroom should consider which is not “Did anyone affiliated with our Company serve on the board of Penn State and if so what are we doing as a company to protect our brand?” but, “What guidance and oversight can we provide to our employees to ensure that their seat in a nonprofit boardroom is occupied with an individual who is informed and will advocate best practices for that nonprofits stakeholders.
First let me say, that on a personal level, what happened to the children on Penn State’s campus and their lack of a voice both during and after the incidents is appalling. And, it is critical that companies continue to encourage and commit that their employees invest their time to support and provide leadership on nonprofits boards. However, in light of this recent tragedy it is imperative that a company provide their employees with the tools to promote best practices in the nonprofit board room. A company’s current shareholders should have limited risk from the good works that the thought leadership of the company has engaged in. I suggest that the board and CEO consider the following measures to align their interest—possibly through the filter of the CSR Policy—to ensure that their employees and board members have the information and training they need to back best practices in the nonprofit boardroom they serve.
Make sure your employees know that serving on a nonprofit board is no different than serving on a public or private board. They have the same duty’s to the entity’s shareholders and key stakeholders to:
- Duty of Loyalty, Duty of Care
- Hire and fire the CEO
- Provide Fiscal and fiduciary oversight
- Provide Strategic oversight
- Inventory what nonprofit boards your Board and employees serve on – While strategically it may benefit a company to have its CEO and “C” suite executives on nonprofit boards for networking, exposure and brand association and inventory would allow the company to reward those employees who give back to the community and encourage others to do so.
- Compare your company’s strategic initiatives focusing on your CSR statement with where your Company’s thought leadership is invested and access the gaps and overlap.
- Provide ongoing governance training for those employees currently serving or preparing for nonprofit board service.
- Review existing policies regarding board service
It is critical that a company access the risk to their brand if the nonprofit board service of their board members or employees becomes damaging by balancing the importance of their employees to do so. I see the recent Penn State tragedy as a call for all of us to discard the past filter by which we assessed nonprofit board service with the same filter we use as shareholders, stakeholders and board members of the public sector.