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A Guide to Board Behavior and Decision-Making
Many associations adopt a set of principles — often called a code of conduct, a statement of expectations, or something similar — designed to guide the board’s decision-making and behavior. Boards develop such guides to instill trust in the integrity of the board and reinforce board members’ commitment to the values of the association.

A typical example might include guidance on the expected duties of board members, such as upholding fiduciary responsibilities and being an active participant. These, of course, can be tweaked and customized depending on the specific values of a given board.

While it’s important to outline the board’s values in such a document, there are potential pitfalls. Attorney Paula Goedert, partner at the law firm Barnes & Thornburg LLP, outlines what they are and how to avoid them.

What’s in a Name?

Again, associations use a variety of terms to describe these guiding principles for board members, such as code of conduct, code of ethics, or statement of expectations, to name just a few. All mean roughly the same thing. However, Goedert suggests avoiding one of the names in particular — code of ethics. In fact, she would not recommend board members sign a document called a code of ethics. Ethics is a very powerful word, she says, and misuse of the word could be potentially damaging.

For example, while the intention is to guide board members on their duties, a code of ethics could be used as a weapon in a political fight. If there is a conflict between board members, one could cite a transgression, no matter how minor — like failure to read the materials in advance of a meeting — and call out the other for being unethical.

“An accusation of being unethical can impact their career in a dangerous way,” says Goedert. “Take lawyers or doctors, journalists, scientists, or almost anyone in a profession. You call them unethical publicly and that’s damaging. Now, all of a sudden, you’ve got a claim of defamation because their career is on the line,” she says. “So, using the term ‘ethics’ blows the whole thing out of proportion.”

Instead, Goedert recommends having a set of rules that’s called either a statement of expectations, or expectations of board members. Not meeting one of the expectations is much different than being called unethical for violating a code of ethics, she says.

Expectations of Board Members

What should be included? Generally, these documents should reflect expectations regarding board members participating in an active, honest, and dedicated way. For example, they might include tenets such as:
  • Respect the opinions of fellow board members and support the actions of the board even if you were initially against the action taken;
  • Be a positive representative for the association, even outside of board activities;
  • Make it a priority to attend at all meetings of the board;
  • Display courteous conduct with staff, speakers, and fellow board members;
  • Do not intervene on issues that are the responsibility of staff;
  • Be prepared for each board meeting by reading all background materials;
  • Follow the proper lines of communication to the executive director when seeking information or assistance from staff.
Of course, this is just a sampling of what to include. For every association, the principles are going to be slightly different based on its specific values and beliefs.

To Sign or Not to Sign

Another key question, says Goedert, is whether to have board members sign or initial such a statement to confirm their understanding. “It really depends on the atmosphere of your board. Requiring a signature may not be right for all organizations.” Some boards see it as a reasonable request, but others may find it to be condescending and off-putting, she says. They also might interpret the request as suggesting that they aren’t aware of their duties. “There could be a backlash,” says Goedert. “Further, what happens if someone refuses to sign it? What recourse do you have? Are you going to go to your membership and say we're not going to let Dr. Jones, this world-famous scientist, serve on the board because he refuses to sign the code of conduct?” That’s probably not a good idea.

The intention of a statement of expectations, she says, is to educate and guide members on how to conduct themselves — not to play “gotcha” if they fail to meet expectations. Therefore, Goedert believes it’s much more constructive to train board members on the proper conduct, using the statement as a tool or guide to supplement the education. The board might consider making it part of the orientation process, perhaps having a consultant or an experienced board member educate new members on the expectations.

Conflict of Interest and Confidentiality

Many associations do require board members to sign a conflict of interest disclosure statement on an annual basis. A conflict of interest disclosure means that if a board member has a personal or financial interest in another entity — perhaps a vendor, another nonprofit, or an academic institution, for example — he or she is expected to disclose that information in advance. The board member, by signing the document, also agrees to recuse herself from any discussion or vote concerning the conflict.

Goedert also notes that many organizations require a signed confidentiality agreement. This confirms that the board member agrees not to discuss confidential matters with the press or someone outside the organization. This encompasses any discussions, reports, correspondences, or other materials that are deemed confidential. A confidentiality agreement may be useful to foster an environment where board members can speak freely and honestly. Plus, having information disclosed outside of the board can be very damaging to the association. “It’s what we call an in terrorem document,” says Goedert, “which means that if they sign it, they think twice about violating it.” Goedert recommends that boards get these documents signed by board members, but adds that each individual board should make their own determination based on their specific circumstances.

All these documents — from the statement of expectations to the conflict of interest and confidentiality agreements — are important to guide the organization forward. Administered appropriately, they will create a framework for how decisions are made, board members conduct themselves, and the organization is viewed by stakeholders.
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Board Forward is published 10 times a year by SmithBucklin, the association management and services company more organizations turn to than any other. SmithBucklin has served volunteer board members for 70 years.


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