One of the risk management blogs that I subscribe to is one written by Donald Kramer Esq. Mr. Kramer is the chair of the Nonprofit Law Group at the Philadelphia law firm of Montgomery, McCracken, WAlker & Rhoads LLP. Mr. Kramer has more than 35 years of experience dealing with the concerns of nonprofit organizations, not only as a lawyer, but also as a teacher, writer, publisher, and board member. Mr. Kramer is editor and publisher of Don Kramer’s Nonprofit Issues®, a national newsletter of “Nonprofit Law You Need to Know.” He writes and lectures frequently on nonprofit legal issues, and teaches a course on nonprofit organization law at the University of Pennsylvania Law School. He has worked with nonprofit organizations of all types and sizes.
Recently, Mr. Kramer answered the following question: Do you consider it a conflict of interest for the executive director to also serve on the board?
Below is his response.
“I don’t think it is an automatic, insurmountable conflict for the CEO to serve on the board. Business certainly doesn’t think so, and although that is not always the standard (See Ready Reference Page: “A Corporate Mentality in Charity Boardrooms? Hey, Bring It On”), it is at least relevant to the consideration. The dual role can create a conflict on certain issues, but everyone has the potential for conflict, and conflicts can usually be resolved by disclosure and recusals.
I don’t think it makes a lot of difference in most cases. If the founder is CEO, the founder ought to be on the board. In some large organizations, or in advocacy organizations, the CEO is so significant in the public image that the CEO should be on the board. I think it depends on the organization. In most cases, the CEO does not serve on the board, but there is no one-size-fits-all in nonprofits, and I have never been particularly exercised by this issue.”
It’s nice to find nationally respected professionals who agree with me. 🙂