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November 2019 Monthly | Nonprofit Board of Directors Requirements

Monthly Digest

You’ve got the people.

We’ve got the resources.

Hello,

What is HR’s role in supporting an ethical environment within an organization? For HR leaders, addressing issues that influence their organization’s ethics needs to be a top priority. This month, I wanted to share some resources and recent stories that will help you better navigate the ethical challenges we face on a regular basis. The lead article covers nonprofit board of directors requirements.

Best,

Corban OneSource, CEO

One question that frequently arises about nonprofit payroll is whether or not board members can be paid employees. Let’s explore this question further to determine what would be considered ethical and what is legal.

Excerpt from the above article:

Nonprofit Board of Directors Requirements:  Paid Staff Members Should Not Sit On NonProfit Boards

Most nonprofit board members operate in a volunteer capacity or are brought on to serve as an objective, third-party source. Bringing on board members who are also internal staff can compromise the integrity of the board and create several conflicts of interest. Whether overtly or indirectly, putting a board member in a situation that lends itself to a conflict of interest eventually leads to a higher potential for a major issue. For example, an employee board member may vote in the interest of keeping their job or creating opportunities for their own advancement. 

Additionally, promoting paid employees to also serve as board members, even in a nonprofit capacity, creates competition amongst the ranks of the organizations leaders to vie for influence by sitting on the board.  

However, There is Always an Exception to the Rules of Nonprofit Board of Directors Requirements

While it is not a good idea for a nonprofit board to appoint paid employees, there is typically at least one paid employee in the room when the board meets. This person is a non-voting member who serves as an advisor to the board. This board member, typically an executive director, provides insight into the operations of the nonprofit and answers questions that the board brings up. They will not vote on any issues so as not to compromise their integrity. 

It is only recommended to have one paid employee on the board in this advisory position.  

235 3rd Street South, Suite 300

St. Petersburg, FL 33701 • (844) 394-3279

Corban OneSource, 235 3rd St S, St. Petersburg, FL 33701, 727-803-1800

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