Is it a conflict of interest for a board member of an organization to serve as a volunteer: Part 1

Boards of nonprofits and public bodies occasionally have questions about how to handle individuals serving in two roles, here are some thoughts.

Consultants and educators who work with public and nonprofit boards occasionally get questions about a variety of conflict of interest situations, and other situations that appear to be conflicts of interest. One such situation is that of a board member who also serves as a volunteer. It is a common situation for many boards, especially for small organizations. These organizations often have few resources to hire staff and as a result depend heavily on volunteers to accomplish their mission. 

I’m not an expert on the legal aspects of conflict of interest. I do have nearly thirty years’ experience that includes serving on boards, and studying and teaching the governance work of boards. Here are several things to consider when your board finds itself in one of these situations: 

  • ‘Conflict of interest’ generally suggests a financial conflict, so for issues of pay, benefits, etc, there would be a conflict to serve on a board while also being an employee. As a volunteer, that issue becomes much grayer, since there is usually no compensation involved. There are likely to be issues of oversight of one’s own work, however.
  • Some consultants suggest that many organizations’ boards have become too distant from their stakeholders; wealthy business owners and community leaders serving as the board for a nonprofit that serves under-resourced people in the community, for example; and recommend that those boards include stakeholders. This would suggest that having a volunteer on the board brings more transparent communication to the organization, and a stronger ability to serve the intended population.
  • The Executive Director (ED), by whatever title they are known, now has a volunteer, for which the ED has oversight responsibilities, serving on the board to which the ED reports. This can be a very challenging situation for any ED. It becomes less of an issue if the board functions properly as a board, making decisions as one, rather than individual board members acting as if they have some individual right to oversee the ED. It is also less of an issue if things are going well, but can complicate matters considerably if there are problems. 

Part two of this Michigan State University Extension article discusses the remaining four considerations, the last of which is more of a recommendation of action to help this common situation work more smoothly.

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