Stanford Social Innovation Review

Stanford Social Innovation Review is an award-winning magazine covering best strategies for nonprofits, foundations, and socially responsible businesses. Published quarterly by the Stanford Graduate School of Business.

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David Hosley on Board Development
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Are you aware of any best practice that addresses the inherent conflict of interest when a board member or board president is hired as the executive director without resigning from the board while being considered for the position?

Best practice is for nonprofit boards to have conflict of interest policies in place. The general thrust is that any time a board member has a relationship with the organization that could benefit him or her personally, the conflict has to be declared and the board (or leadership of the board) decides whether it is acceptable or not. pplying for a job with the organization while on the board is definitely within the realm of conflict. It’s also ethically wrong because it puts the board members making the decision in an unfair position. I’m not a fan of former board members going to work for nonprofits in general, but it happens more often than one might expect. There should at least be separation so the decision is made in an ethically sound way.

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