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Nancy A. Gaston

About Nancy

Background Checks for Board Members: Paranoid or Prudent?

A decade ago I resigned from the board of a small nonprofit. Because the treasurer was providing vague and inconsistent financial statements and couldn’t seem to answer my questions, I was uneasy about serving. Just weeks later I opened the local newspaper to find the treasurer’s picture on the front page. She’d been arrested for embezzlement.

Would criminal background checks of prospective board members have prevented this situation? I wondered about that at the time, but wasn’t sure if anyone conducted checks on their board members. The only attempt to do so that I was aware of involved a California organization serving the lesbian, gay and transgendered population. When the provider of its directors and officers insurance requested such checks the board had responded angrily and publicly to this threatened “invasion of privacy,” a stance that could not have gone over well with the agency’s paid and volunteer staff, all of whom submitted to such “invasions.”

Now the issue is getting more attention, partly in response to legislation passed in New Jersey mandating criminal background checks for all members of the boards of public and charter schools. Compliance has been slow, but at least five sitting members of school boards have been dismissed because of felony records. Some other school boards and local governments are following the New Jersey example. Lubbock, Texas, is considering background checks of all applicants for city board positions, a move precipitated by the revelation that a recent appointee was under criminal indictment.

Do criminal checks of nonprofit board members make sense? Some volunteer resource managers I asked voiced a strong “yes!” As one noted, “Any other volunteers with access to the kind of confidential information boards deal with would be checked. Why are board members exempt?” Another agreed, pointing out it would be worth it if only to avoid the embarrassment and tarnished public image that would result from revelations about a board member’s past missteps.

Other volunteer management professionals aren’t so sure. Board members are usually people fairly well known in the community, they point out. Candidates have solid reputations. Requiring them to submit to checks could seem less than collegial and might be a deterrent to service.

I sense this dialogue has really just begun. In our litigious society, insurance carriers are moving toward requiring checks of more and more employees and volunteers and may mandate more scrutiny of board candidates. But are investigations of board applicants worth the money (generally from $50-$80 apiece) and the time (for paperwork, fingerprinting and the period before the results come back)?

Ironically, the smaller the organization, the more advisable—and the more problematic—background checks may be. Working boards of grassroots groups have more access to information, funds and even clients than do the members of policy boards of larger agencies. But small local groups are least able to afford the fees and are most likely to feel backlash from their communities.

So arguments for conducting background checks for board members include these:

  • The very fact that such checks are conducted will often deter problematic candidates from applying.
  • The checks can represent due diligence and protect the organization from liability should something go wrong.
  • If other volunteers in the agency or program are subjected to background checks, it seems only fair that board members be treated equally.

And those arguing against such investigations cite these reasons:

  • The background checks are relatively expensive and time consuming and do not seem to be a good use of nonprofit resources.
  • Board candidates are generally well known people with solid reputations in the community.
  • Such scrutiny undermines a sense of community and collegiality and may turn off those who could be good board members.

Underlying the discussion is a cautionary fact any good volunteer manager knows—namely that background checks don’t prevent wrongdoing. Often a misbehaving volunteer at any level in the organization had passed or would have passed a record check. I am personally aware of six such instances; in five of them the offending volunteer would have passed a criminal check with flying colors. And in the well-known recent Penn State scandal, the person now serving a prison sentence for abuse had no prior convictions, so nothing would have shown up had there been background checks done for the board of the nonprofit he founded.

Doing a search may protect the organization from legal liability, but common sense (which sometimes seems to be not all that common) and a well-designed risk management system offer the best protection. For boards, that system includes training, clear policies on confidentiality and whistle blowing and detailed procedures for handling money.

A good beginning risk management checklist for boards might include the following:

  • Do board candidates fill out an application?
  • Are interviews conducted of potential board members?
  • Are candidates asked to supply references, and are these references checked?
  • Do board members sign an agreement outlining expectations, including confidentiality, regular attendance at meetings and scrutiny of financial reports?
  • Is there a whistleblower policy to protect anyone—paid or unpaid—who reports suspicious behavior or irregularities?
  • If funds are handled by board members, are procedures spelled out and forms provided (for example, two persons tally the funds, a third checks the results and signs off on the total)?
  • If board members have access to vulnerable clients—children, youth or frail adults—are they aware of procedures to protect them, the client and the agency (for example, not being alone with a client)?

When it comes to protecting organizations, clients and volunteers—including board members-- prudent practices trump paranoid reactions every time.

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