Dear Nonprofiteer, Can a Board member become interim Executive Director?

Dear Nonprofiteer:

Our small organization recently terminated our Executive Director.  There is one board member, Martha, who has been working long-term in the office to review books, grant applications, etc, who was instrumental in documenting our previous ED’s administrative mismanagement.  Now that the ED is gone, the organization is in dire need of someone who can fill in, and Martha is offering to work in the capacity of Interim Executive Director for a monthly stipend.

I feel like this is a potential conflict of interest. Even if Martha resigns from the board in order to take this interim position, she was instrumental in the ED’s termination and will now benefit personally by taking money to fill the position, no matter the financial amount or length of the term.

Is it legal for a board member to take an interim staff role?  Is it ethical?

Signed, Is Something Rotten in Denmark?

Dear Denmark:

It’s certainly legal for a Board member to take on an interim staff role, and in fact it’s quite common, because so few agencies have access to trained assistance at the very instant they need it.  But your sense of the situation seems to me absolutely correct: neither Martha nor anyone else on the Board should benefit personally from actions taken as a Board member, and in this case she would be profiting from having blackened (however justly) the reputation of someone holding the job she apparently wanted for herself.

Your colleagues on the Board will doubtless say that there’s no one better qualified–maybe no one else qualified at all–to take on the Executive Director role; but that’s why Boards should have clear conflict-of-interest policies in place in advance: because there’s always a good reason to look the other way about a conflict of interest.

And Martha’s leaving the Board now wouldn’t cure the conflict, any more than her recusing herself from the decision to appoint her.  It would simply make it more likely that she’d ask next to be appointed permanent Executive Director, thus magnifying the conflict to impossible levels.

What is to be done?  If she’s really the best-qualified person to do the work of Executive Director temporarily, ask her to do it as a volunteer, in which case it’s just a natural extension of the volunteer time she’s already putting in as a Board member.  This is, of course, a huge thing to ask of any Board member–making it likely that Martha and the rest of the Board will move expeditiously to find a permanent replacement, which is what this company needs if it’s going to survive the kind of trauma you’ve described.

Or–even better–if your city, like Chicago, has a program to train Interim Executive Directors, contact the agency that provides the training and ask for the names of program graduates who might be available to take on this task.  The real benefit of having an interim ED at any nonprofit is not to have the day-to-day tasks taken care of but to have old problems and dead wood swept away by someone who isn’t a candidate for the permanent position and therefore needn’t fear offending any person or clique.  Even if Martha is willing to become ED for free, she will inevitably carry with her some baggage from the organization’s past, which is just what it doesn’t need right now.

Don’t let convenience–“She’s right here, and she already knows the books!”–trump either ethics or the opportunity to set a troubled company on a new healthy path.  Stick by your guns and keep Martha on the Board where she belongs.

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6 Responses to “Dear Nonprofiteer, Can a Board member become interim Executive Director?”

  1. deborah strauss Says:

    Chicago has such a program run by the Executive Service Corps. Compasspoint in SF also has one. The alliance for nonprofit management maintains a consultant list which may include interim ed’s.

    • Nonprofiteer Says:

      Thanks for the specifics–you know the Nonprofiteer’s weakness for glittering generalities!

  2. Beth Myers Says:

    Actually there are a lot of firms who place interim execs in nonprofits and it really is the best alternative for boards in these types of situations. In fact, at my firm, Transition Management Solutions, we encourage an interim even in the situation where there is someone on staff who might fill as the interim for some of the very reasons you list above. It can make the new permanent executive’s transition much more difficult if the person who served as the interim was a candidate who did not get the permanent job. Your writer should do an internet search for nonprofit interim execs to find who may be offering that service their area.

  3. Mazarine Says:

    In the last 4 years I have seen 2 EDs placed from the board, both with MBAs, NO nonprofit experience, and the results have been unmitigated disasters.

    Don’t let martha take over. It’s bad news.

    Mazarine

  4. Makidan Says:

    I disagree that there is an automatic conflict of interest here. The work of the Board was independent of the proposed solution to the vacancy and the fact here is that the wrongdoing was established. There is no reason the Board Member should be barred from being appointed by the rest of the Board to the position of ED except is she was the sole finder or witness to the alleged wrongdoing.

    • Nonprofiteer Says:

      There isn’t an automatic conflict of interest but there is the appearance of impropriety–it looks inevitably like the ED’s being pushed out for the Board member’s benefit. But as the earlier comments make clear, the biggest objection to former Board member Executive Directors is probably not the conflict of interest but the lack of ability to change perspective, which is essential when one moves from governance to execution.

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