Lack of Transparency Erodes Trust

For my first blog, I shared a story about a board chair who stepped up to help the Executive Director (ED) in time of important and impactful change. The organization successfully survived the change because of the trusting relationship between the board chair and the ED and because the board deeply supported the ED, going far beyond what they thought would be expected.

For my second blog, I am sharing two stories by the same individual who notes that when a board chair or executive committee become too powerful, trust erodes. This individual shares their ideas about trust, transparency, and having clear roles for board members.

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Two stories About Power-Grabbing Executive Committees

By a Dedicated Board Member, Somewhere in USA


Nonprofit board chairs have the power that people decide to give them. If you have board members who are not paying attention, the board chair has a lot of power. Or sometimes you have a board chair who thinks they have a lot of power and they intimidate others. Or sometimes the executive committee has all the power. I have two stories about this.

Leadership Needs to Welcome Participation of Board Members

I joined a nonprofit board that had a real mix of people. Everyone was noteworthy in their sector. It was one of those boards with big names and others who may not have been as well-known but were very successful. There was no organized orientation. You were just thrown into the deep end. There was a lot confusion about whether it was a fundraising board or an operations board. I was mystified about my function. When I am on a board, it is important to me to participate and to have leadership that welcomes my participation and defines what my role is.

Executive Committee Won’t Share CEO Salary

In this case, a powerful executive committee had taken over. There were five of them. The board was probably about 20 people. They were in the process of hiring a new ED when I came on the board. The executive committee hired the new ED and came in to get the board’s approval. It may not even have been approval, it may have just been informing the rest of the board. They weren’t going to tell us what we were going to pay the new ED. It was really odd. I am a board member and they don’t want to tell me what they were going to pay him? I was new enough that I did not feel comfortable jumping in and telling them it was ridiculous. Fortunately, another well-respected member of the board was blunt. The member of the executive committee who was reporting out went around the subject a few times. Finally, this other board member said, “I need to know.” The member of the executive committee replied, “Well if you really want to know, we can tell you.” This was after 15 or 20 minutes of avoiding the question. Ultimately, they did tell us.

There are lots of lessons from this story. First, when you bring on a board member, have some clarity about what you expect the board function to be, about what the executive committee is and how it functions, and then hold an orientation to make sure board members understand the function. Spend time figuring out how to usefully employ the board members you have chosen to recruit. If you can’t use board members in a productive way, then maybe your board should be different.

My own personal view is that the executive committee should never be in the position of making any ex parte big decisions without consulting the board or coming back to the board. They can make a lot of decisions that can be clearly delineated, and they can make emergency decisions between board meetings. But the notion that the executive committee can hire a CEO, pay him a certain amount, and then never tell the rest of the board what that amount is – is crazy. It is a power thing and a lack of trust on their part.

Board Members Must Speak Up

One of the hardest thing to do as a board member is to say to leadership and a powerful CEO “You might have your view of what you think I should know. But I have a duty to know what I think I should know. Let’s figure this out.” It is hard to do that.

Backlash When Board Chair and Exec Comm Get too Powerful

I had a similar experience years earlier only it was the renewal of a contract for a CEO.

The chair of the board was one of those in perpetuity chairs. Someone gets to be chair and to put someone new in is like a coup d’etat. The Executive Committee also had a lot of power. So, the Executive committee did the renewal for the CEO and did not consult or tell the rest of the board. The new salary was big. When the rest of the board asked about it, they hemmed and hawed. Finally, they told us. A number of us in the room looked at each other asking “Why would they pay that much money?”

What followed were pretty contentious two or three years. The executive committee and board chair lost the trust of the rest of the board. Others on the board started pushing changes. We established terms in office, term limits, etc. We brought in best practices.

Choose Transparency

The lesson has to do with the leadership of the board. What should the leadership of the board be doing? When is it appropriate to keep things closely held? For example, if you have a search committee talking to people who are still employed, then it is a completely legitimate to keep things closely held. But when you come down to the final interview or to hiring somebody, it’s time to be transparent.

Unless you have legitimate reasons to keep things confidential, it breaks down trust. If you have legitimate reasons, then you should tell the board what and why and for how long you want to keep things under wraps. The need for transparency may change from time to time if there are legitimate reasons for confidentiality. But transparency is always a better course.

Additional Resources.

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