You’ve been asked to serve on a board of
directors. Before saying “yes,” Eric Featherstone, CAE, vice president of association management firm Melby, Cameron &
Anderson, suggests you consider asking
these questions of the officers, nominating committee or the paid executive:
1. Why are you asking me? Find out what
skills they are seeking. You might be asked
because of your influence in the community, your passion or skills. Has the composition of the board been carefully planned?
Run if they are just looking for warm bodies
and you happen to fit that profile.
2. Does the organization have subsidiaries or related organizations? Find out
if this board is a parent to other organizations for which you may be responsible,
such as a subsidiary foundation, for-profit
corporation, local chapters and/or a political action committee. Will your board
service carry over to the subsidiaries? Ask
for an organizational chart.
3. What about insurance? If directors
and officers insurance covers the board,
how large is the policy? If you see an
expense line item in the budget for insurance, ask what types of insurance and
expect to hear: general liability, a surety
bond and possibly meeting cancellation.
If someone says, “don’t worry about insurance, we’re covered by volunteer immunity,” be very cautious!
4. Are there pending lawsuits or claims
against the association? Nobody wants to
get on a board and find out the year will
be full of depositions, defense strategies
and legal concerns. Ask if there are any
claims against the association, including
member or employee claims.
5. What’s the board’s relationship to
committees? The structure of committees
might increase the workload. If the organization adheres to the principles that
“committees advance the work of the
board,” and “the board doesn’t do committee work at the board table,” you’re in
luck. However, if you find out that the
committees are composed of the board
members, then you’ll be wearing the hat
of board member and committee member.
You may be expected to chair or serve as
a committee liaison.
6. Does the board think strategically? The
best answer will be evidence of a strategic
plan. How old is the plan? Is it concise and
compelling? When is the next planning
retreat scheduled? If it is during your term,
you’ll be expected to put in an extra day or
two to create a new strategic plan.
7. What’s in the leadership manual? A
thorough manual will provide the governing documents (bylaws, articles and policies), as well as a clear report of finances
and assets, and descriptions of board
responsibilities. The IRS records are public; if they are not in the manual, feel free
to ask. Do not ask for personnel files —
they are the responsibility of the executive director, not the board.
8. How long is my term? Will you be
expected to serve a second term? Are
there term limits? The answers should be
in the bylaws. If you are hoping to move
up the leadership ladder, you could be
serving seven to 10 years.
9. What’s the organization’s tax status?
Some associations are for-profit
corporations while others have lost their tax-exempt status. Don’t assume the
organization is a nonprofit corporation,
exempt from paying federal income tax,
until you ascertain the facts.
10. How are conflicts of interest handled?
The composition of a board brings together
people with different interests. It is possible that a director may have a conflict of
interest from time to time. Effective in
2008, the IRS Form 990 asks, “Does the
organization have a written conflict of interest policy? If yes, are the officers, directors
or trustees and key employees required to
disclose annually interests that could give
rise to conflicts?” As a new director, you’ll
want to consider if you have any conflicts
that you’ll be expected to disclose.
11. How frequently does the board
meet? Some boards meet for 90 minutes
every other month while others might
meet quarterly for a two-day marathon.
Find out now how much time you’ll be
expected to set aside. Then add the time
needed for preparation, travel, on-site
attendance and follow through.
12. Does the organization have a regular financial audit? An annual financial
audit by an independent CPA ensures that
when you take your seat on the board the
books recently have been looked at for
discrepancies or mismanagement.
An audit tends to remove the opportunities for mismanagement of finances.
Make sure the organization has a recent
audit and received good marks in the
management letter. (It is OK to ask for a
copy of the audit.)
13. Does the executive director have a
contract? It is a board responsibility to
hire and evaluate the performance of the
paid executive. Are you being asked to
serve on a board that has no paid executive? Or is the executive retiring and you’ll
have to help find a replacement? Most
boards say that the executive search
process can zap energy and creativity for
months. Find out if the executive has an