EDITORIAL: Nailing down boards

From ANIMAL PEOPLE, July/August 1994:

Three outstanding executive directors of humane societies were ousted last month
due to board politics. All three are nationally noted authorities on various aspects of
humane management. One was forced into retirement after 25 years on the job for alleged
fundraising failures in a city hit by three disasters during the past two years. Another,
known for turning deficient shelters around, was apparently fired from his third such effort
because the board didn’t like his ultimatum to either help or quit. The third individual lasted
barely six months in his first top job, after a distinguished career as a second-in-command,
because he apparently didn’t realize that the most important duty of most executive directors
is not management of the work to be done but rather management of the board.
Unfortunately, the above paragraph, with minor variations, could be written
almost every month. Only the number of people fired and their lengths of tenure change.
Curiously, none of the people fired last month were in the midst of building a new shelter.
That’s an almost surefire ticket to ouster, since the additional fundraising and the letting of
construction contracts multiplies the opportunities for executive conflict with board mem-
bers. A frequent result of changing executive directors in mid-building effort is that con-
tractual specifications are modified, or supervision is neglected, or both, resulting in cost
overruns and defective facilities. Witness the American SPCA, whose new shelter was sup-
posed to cost $2.9 million when longtime chief executive John Kullberg was booted out in
1991; it actually cost $5 million when opened a little more than one year later; and it still
needs an estimated $400,000 in improvements to meet humane standards. The blame for the
ASPCA fiasco can be cut many ways––we’ve been told by people who should know that
some senior staff never even looked at the blueprints––but it isn’t coincidental that a variety
of ASPCA board problems are almost legendary, including the presence of members who
have flouted ethical policies by openly wearing fur and participating in captive bird shoots;
who have had themselves sworn in as deputy humane officers in order to carry weapons
without a license; and in five cases hold lifetime posts reserved to particular families
through a quirk in the ASPCA charter. Lawsuits have challenged the legitimacy of the
ASPCA board at least four times in the past 45 years.
The financial and organizational problems of the Montreal-based Canadian SPCA,
documented here several times, demonstrate yet another common situation: a polarized
board, whose infighting over the past 15 years has caused it to go through more manage-
ment changes and proportionately greater economic losses than the Montreal Expos baseball
team. It may be stabilizing now, if only because more than half the board resigned in early
1993 when it was on the verge of bankruptcy and they were close to being held personally
responsible for the accumulated debt.
Wherever one looks, humane organizations are crippled by boards whose mem-
bers quarrel, second-guess, do nothing, and/or actively meddle––none of which properly
belongs in a board member’s job description. There are many available summaries of the
functions of boards and executive directors, compiled variously by standard-setting bodies
and consultants, but they all agree on the fundamentals:
The board exists to set broad policy guidelines and to raise funds.
The board must conduct itself according to the highest ethical standards of the
organization, both in public and in private.
Day-to-day management, including the hiring and firing of staff, is none of the
board’s beeswax.
The executive director makes the management decisions. The executive director
reports to the board upon the fulfillment of policy and on financial needs.
Unless summoned by the executive director to make a special presentation about
a program, staff members do not attend board meetings, do not report to the board, and do
not have direct access to individual board members. The proper channels for staff griev-
ances are through the executive director and/or through union grievance procedures.
If the board is dissatisfied with organizational performance, it should fire the
executive director and hire another. It should not try to override particular executive deci-
sions or otherwise micromanage the organization. Nor should it keep an executive director
in a state of limbo, with limited authority to make essential decisions and discipline staff.
There is also general agreement among nonprofit management experts that board
members should be:
Thoroughly familiar with and committed to the objectives of the organization,
with a long history of involvement on behalf of the organization.
Professionally qualified to deal with fundraising and policy questions.
Willing and able to raise funds. (In other areas of nonprofit activity, it is not
uncommon for board members to be required to ante up a certain amount each year, either
through fundraising activities exclusive of direct mail, which is generally supervised by the
executive director, or out of their own pockets.)
Note whom this excludes. Often longtime volunteers are rewarded with a board
post, a fatal mistake unless the volunteers are otherwise qualified, because suddenly some-
one over whom the executive director must exercise authority is in a position of authority
over the executive director. Inevitably conflict results. The remainder of the staff, both
hired and volunteer, becomes confused as to who is really in charge. Similarly, high
donors frequently are given board positions, without adequate grounding in just what they
are to do––an invitation to meddling.
Obviously well-qualified board members are in short supply. It is thus incumbent
upon boards to realize their responsibility to train themselves, on an ongoing basis. A sub-
scription to the Chronicle of Philanthropy, which often reviews board roles, should be
mandatory for board officers; a subscription to ANIMAL PEOPLE could help every
member of a humane society board; and the American Humane Association and Humane
Society of the U.S. both offer worthwhile board development seminars.
It is also incumbent upon boards to terminate vacant seats rather than filling them
with unqualified or uninterested people. Many of the most severely fragmented boards are
so large as to be unwieldy, as factions have tried to stack them one way or the other or
encourage high donations through creating new seats. Rule of thumb: if a board has more
members than the organization has departmental managers, the board is too big. A poten-
tial solution for the too-large board problem is to subdivide into an executive committee,
which will perform the policymaking function, and an honorary board, whose role is
exclusively fundraising––but make sure the executive committee is also committed to
fundraising and that the honorary board doesn’t confuse a title with entitlement to tell any-
one else what to do. At least two national humane organizations and one major regional
humane society have ongoing problems because the board that makes the decisions and the
board that raises the money are either in perpetual conflict with each other or simply have
no contact (in the latter instance to the considerable benefit of the executive director).
Where standards fail
It is likewise necessary that donors become more savvy about the nature of boards.
Since it is unrealistic to expect the average donor to know either the boards of his/her
favorite charities and/or have expertise in nonprofit management, this really means per-
suading the National Charities Information Bureau, Better Business Bureau, and other
standard-setting bodies, including legislatures, to update their ethical requirements. Extant
requirements focus upon preventing material conflicts of interest, an essential goal in that
charities can and have been used to squirrel away tax-exempt family fortunes, provide
sinecures to heirs, and/or enrich executives and board members. As ANIMAL PEOPLE
has documented, the National Anti-Vivisection Society demonstrates the potential for abuse
in that the current board president and executive director succeeded her own father, while
family members hold at least half of the board seats and all of the top-paying jobs in the
organization. Yet it is important to realize that none of the above might be a problem if
NAVS had not also heavily invested in companies which not only perform but promote vivi-
section, while paying the top executives huge salaries relative to organizational income,
and providing such outlandish perquisites as a television-equipped van reportedly used as
the personal vehicle of the board president’s husband. The abuse lies in the response of the
individuals in question to the situation, not in the situation itself. And, ironically, NAVS
so neatly follows the letter if not the intent of the various codified ethical requirements that
it recently drew the top rating of any national humane organization from one minor indepen-
dent reviewing body. People for the Ethical Treatment of Animals, meanwhile, consistent-
ly flunks the ethical requirements of the NCIB because it avoids both board problems and
conflicts of interest through the simple expedient of limiting board membership to three:
cofounders Ingrid Newkirk and Alex Pacheco, plus one other trusted associate. We’re criti-
cal of PETA for many reasons, but the NCIB rulings are blantantly unfair, in that no one
has ever turned up the faintest hint that PETA is either enriching anyone or failing to spend
donations consonant with its charitable purpose. The structure of the PETA board, together
with the self-disciplined nature of the individuals involved, insures efficient management.
Enlarging the board to eliminate the “conflicts of interest” occasioned by the presence of
more than one voting staff member would do nothing to improve organizational integrity.
The same could be said of ANIMAL PEOPLE, whose board and staff are one
and the same, and of hundreds of other relatively small, tightly structured and eminently
effective humane groups, for whom accountability is a matter of being visible to the donor
base. If we’re not doing our job, you see it. If the Mom-and-Pop Animal Rescue League’s
founders drive a Porsche they didn’t have before they mailed their most recent appeal, the
community soon talks about it. If programs are adequately publicized and if executive com-
pensation and financial statements are published on an annual basis, the objectives of the
NCIB, BBB, et al are met even if every member of the charity in question is both related
and on the payroll. Real accountability begins not with board structure but with disclosure.
That’s why we publish the financial essentials of all the major national animal and
habitat protection groups each December. We regret that time and space don’t allow us to
do the same for each of the 3,000-odd regional and local humane charities in the U.S. and
Canada. We believe that by and large, animal-related charities stack up fairly well in the
area of ethical use of resources, compared to charites in other fields––and our reading of the
Chronicle of Philanthropy and other sources of information indicates that the greatest mis-
use of resources in this field as well as most others comes not through self-aggrandisement
and fraud, though certainly these are problems on occasion, but rather through ordinary
mismanagement resulting most often from board misperformance.
It is time the accreditation standards many donors use to guide them were updated
to stress operational efficiency as well as oversight, and to recognize that the best oversight
comes not necessarily from uninvolved and unrelated parties, nor from large boards, but
rather from dedicated people, whoever they are, who both keep the charitable purpose fore-
most and know how to work together to make decisions.
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