What do I do if the board is ignoring the CEO?
In this help sheet series, Our Community’s resident agony uncle, Chris Borthwick, offers answers to frequently asked questions about issues not-for-profits are facing.
Dear Agony Uncle,
I am trying to help my CEO, whose views are being disregarded by the board in a matter which may soon seriously risk the longevity of the organisation.
I guess some guidance on how to deal with such board matters would be useful, as the lack of mandate on boards at not-for-profits and charities often makes it difficult to navigate such decisions.
Agony Uncle's answer
I'm sorry, but I have absolutely no joy for you. The board has virtually utter and total power over the organisation, and the CEO is bound to do what the board says – however shortsighted, morally wrong, financially disastrous, or generally inadvisable the board's preferred course is.
The board's mandate is that they were voted in at the AGM. That's all they need – no matter how many (or few) people voted for them, it's all they need. The CEO, after all, wasn't voted in by anybody.
If the CEO can't negotiate with the board, or persuade the board, or warn the board, then that's that. The general view of the people who wrote the laws is that (a) the members should pick the board and (b) the board should run the organisation with almost no internal checks.
If the board is actually doing something illegal, then you can complain to the police, but nothing short of that will do. And that's a very high bar: stuffing around with the rules is only, at worst, a breach of contract. Neither state regulators nor the Australian Charities and Not-for-profits Commission (ACNC) will intervene in a decision between members and the board, still less one between staff and the board.
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