According to the PwC Directors Survey we covered last week, 40% of board members believe that at least one member of their board needs to be replaced. With boardrooms standards rising higher than ever, it’s no surprise that some board members just aren’t measuring up.
Removing a board member, however, is an extremely sensitive process that few are willing to undertake. Here are our tips for proceeding with the utmost respect and consideration. (Keep in mind that the procedures for companies vs. nonprofits will vary slightly according to individual rules of governance.)
Review your bylaws and follow them
Before taking any action, determine whether the member in question truly isn’t meeting the standard for his or her outlined duties. Make sure that you collect fact-based evidence only. Look at the bylaws for your organization, and utilize the processes it will likely lay out for this sort of scenario.
According to Sam Ashe-Edmunds of Demand Media, “Your bylaws might require the board to justify any removal based on fraud, conflict of interest, personal conduct, lack of fitness to serve or failure to perform.” You’ll need to establish exactly which aspects of the role the board member has not fulfilled or why their presence is no longer productive for the board.
Schedule a small meeting
In the majority of cases of board removal, the member in question simply isn’t showing up for meetings or preparing for them. While following the bylaws of your board, appoint at least a couple representatives (the head of the governance committee, the board president, etc.) to initiate a meeting with the board member.
In this scenario, the representatives can address the issues in a private setting with a secondary witness. In some cases, the board member in question may have a difficult family situation that is preventing him/her from fulfilling their responsibilities. In that case, it might be prudent to ask the board member to take a leave of absence.
In other situations—particularly in nonprofit settings—board members may be looking for an “out” from their role. Ask the board member if they wish to resign or step down quietly if they feel as if they can no longer meet expectations or have no desire to continue serving on the board.
If the representatives address some issues with a board member who responds positively and is eager to better their performance, set a time frame for the board’s expectations. Be sure that the board member knows that further action will have to be taken if standards aren’t met.
What if the board member in question is simply considered toxic to the boardroom? In instances like this, it’s still a good idea to have a conversation early on. Some board members don’t realize that they’re coming off as extremely difficult or intolerant of others’ opinions. Use respectful language, but clearly state that their current behavior is unacceptable and won’t be tolerated moving forward.
Consult your lawyer
If the board member in question continues to be a hindrance to the board and refuses to either better their performance or resign, it’s time to get your lawyers more deeply involved. Have them review your articles of governance in order to establish the best legal means for removing the board member.
A lawyer will also be able to cull through the specific legalities in your state according to what kind of company you’re serving. In some instances, many nonprofit boards will actually have to pass a measure to create said means, if the process has not been previously established.
Once those means are clear, follow the guidelines they set forth with transparency.
Review your board recruitment process
Rather than simply moving forward and removing a board member, take some time to review the way your board recruits future members. Could the issue have been avoided by adding an element into the recruitment process? Have an open discussion in hopes that your collective board can take something positive away from the experience.
Disclaimer: This blog is, by no means, a legal summary of the process for removing a board member. Above all else, ensure that your board follows all outlined governance practices while also seeking legal counsel. Our post is meant to encourage communication and problem solving in the process leading up to potential board member removal.