Michael Ford (post until Oct. 31/19)
Health

Access, quality of information key for non-profit boards

Boards of non-profit and charitable organizations would best be served if they established online portals for members to access key information when needed, as well as separated the roles of CEO and secretary, Toronto health lawyer Kathy O’Brien tells AdvocateDaily.com.

“Boards live and die by being able to access the information they need,” she says.

“It’s important that it’s readily available so that members have access to it when needed in a crisis, and the information must be complete and impartial.”

O’Brien, a partner with DDO Health Law, says that while many large organizations, such as hospitals, already have online portals for boards, they may not contain all the information members and officers need when a crisis emerges. 

In some cases, board chairs and members only have access to organizational documents — such as its workplace harassment policies, CEO employment files and other information — by asking the CEO and that’s not ideal, notes O’Brien, who regularly works with the sector on governance issues.

“This has come up in several circumstances when the board needed access to certain documents and they’ve been difficult to get,” she says.

“For most non-profit and charitable organizations, there should be a secure online portal of some kind where board members are able to access materials they need, including the board minutes, meeting packages, bylaws and policies. It would be a one-stop-shop for members.”

The officers of the board, who may have to deal with sensitive issues such as disciplining the CEO, should have access to a further set of documents, including CEO employment contracts, performance reviews and organizational policies.

“And that board portal would be updated regularly,” she says. 

If the organization cannot afford the costs associated with establishing such a portal, there should be a less expensive way for board members to access the information and the board chair to be updated on a regular basis through a USB key or thumb drive, O’Brien says.

“As the board changes over the years with new chairs and members, that USB could be passed from person to person,” she says. 

“Boards don’t want to be scrambling when a crisis arises,” she says. “Members need to know how to access the information when they need it. This should be something that boards ask their CEOs or executive directors to consider and put in place.”

Another evolving governance practice O’Brien suggests is the need for boards to separate the tasks of CEO from board secretary.

“Both powerful roles should not be held by the same individual,” she says. 

The board secretary is an important position because it’s that person who, among other duties, records the minutes of meetings, which reflect the discussion of the board, sends out the board packages, is responsible for compiling information for the board and ascertains that proper procedures are followed.

“The secretary helps ensure the flow of information between the organization and the board. That information flow should be decided based on the best interest of the corporation and not on individual self-interest. You want to make sure the right information is getting to the board and that no one’s personal agenda is influencing that.”

In the non-profit and charitable sector, it’s most often the senior administrator of the organization, namely the CEO, who carries out the role of the secretary, O’Brien says. 

“It’s just done as an administrative convenience because the CEO comes to board meetings anyway and typically has an assistant to help them carry out these tasks,” she says. 

But there’s a potential risk to combining the duties of the CEO and board secretary, O’Brien says.

“There’s an inherent conflict of interest between the role of secretary and that of the CEO,” she says. 

“The secretary’s role is to ensure the information presented to the board is complete and impartial. The CEO’s self-interest may sometimes be to manage the information that goes to the board. That becomes an issue if someone has a concern about: the organization not performing well; a lawsuit; complaints from patients; regulatory compliance issues; or concerns about the CEO’s performance.”

This leaves open the possibility of a “rogue CEO” who is concerned about how this information would reflect on them and moves to limit what gets to the board, O’Brien says. 

“It would be a great concern if there was a CEO who was limiting or controlling the flow of information to the board out of their own self-interest,” she says. 

Organizations should seek a volunteer board member to take on the position of secretary, or look to a staff member, perhaps the chief financial officer, to take on those duties, O’Brien says. 

“If it’s another staff member, that person needs the ability to report directly to the board,” she says.

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