I’ve read about the importance of board member solidarity with board decisions, but aren’t there times a board member should blow the whistle?

Absolutely there are times when a board member should blow the whistle on their organization. Most of those will be internal, but let’s start with the rare circumstances that require public whistle-blowing. When there is imminent danger to public health and safety, emergency responders and the general public need to know.

Urgent public whistle-blowing

Here’s an example. If a board member were to become aware, for example, that his or her health treatment agency had identified someone with a highly infectious disease and not reported it, they ethically have to act. If a call to the executive director doesn’t result in immediate notification to the public health authorities, I think a direct call to public health is in order. I would, however, first listen respectfully to the executive director about why the call hadn’t already been made. Perhaps the board member heard a rumour the ED believes untrue. The board member could urge the ED to seek out the facts as an absolute top priority, and if appropriate ask the public health authorities to help determine the facts. And in that board member’s place, I’d be following up in a few hours to make sure the ED had taken appropriate action.

Another example is child abuse. You simply can’t ignore that. Most provincial and territorial child welfare laws require those (including professionals and members of the public) who suspect that a child is being maltreated to make a report to the appropriate child welfare authority. Again, as a board member, I would talk to senior management to make sure I understood the situation; I might have misinterpreted some health treatment I witnessed or a piece of equipment being used to help a child deal with a disability. Most board members are not professionals in the field in which their nonprofit works. However, I would promptly carry out my legal duty if I still had suspicions of unreported child abuse. Note that the law requires you to report the suspected abuse directly to the authorities.

In neither of these examples can a long delay be tolerated while you investigate. You don’t have the credentials for such investigations anyway, and the situations are urgent.

Less urgent situations

Generally, a board member will have more time to check out suspicions of legal wrong-doing. For example, perhaps the draft financial statements do not appear to accurately reflect the organization’s year-end situation. It’s not always about the numbers; a note might be missing about a pending legal liability. Many organizations now have an Audit Committee, with at least one member with financial expertise. All members of the committee should have no involvement with daily financial management. They deal with the external auditor, including conversations that do not include senior management before the audit and after receiving the management letter.

As a board member, I would address my concerns to the Audit Committee. In the absence of an Audit Committee, the whole board has to act in that capacity, and should meet with the auditor (teleconference is fine). Ask for that meeting if not satisfied with the Audit Committee response. If the board ignores you and approves the statements without satisfying your serious concerns, call the auditor and talk about your serious concern that the statements are inaccurate. That method of whistle-blowing is appropriate. Calling the local newspaper would not be; there is time to fix the situation without damaging the organization.

The organization’s professional advisors, including its lawyer, will usually be your allies in dealing with concerns relating to their expertise. They can help you confirm whether there is in fact wrong-doing and what your options are.

If the board simply decides that accurate information is presented in an acceptable way, when you would have preferred a different way of showing the same information, that is not in my opinion grounds for whistle-blowing. Board solidarity now applies, though you can certainly ask that your dissent and the reasons for the dissent be noted in the board minutes. And you can seek to improve the presentation for next year. However, you remain a party to the decision. Challenging the presentation at the Annual General Meeting would be highly inappropriate.

Another challenging situation for board members occurs when reports back to major funders appear to misrepresent how the monies were spent. There is a huge difference between reports that put accurate information in the best light and those that lie about the use of funds. However, it’s not easy for a board member to draw the line in the gray areas between those two possibilities.

If monies were diverted to other projects without advance approval from the funder, but are still reported as having been spent on the original project, that violates the principle of accountability and the ethical value of honesty. While the deception might allow your organization to keep the monies from that one grant, it will destroy the organization’s reputation and credibility when uncovered. And it usually will come to light. If the community learns that board members knew about the deception and went along with it, the reputations of each board member will also be harmed. Urge the board to do the right thing, directing senior staff to provide accurate reports even if that means returning some of the funds. If the organization chooses to lie, let the other directors know that you will be calling the funder. Once they know the deception will become known anyway, they will likely correct the reports.

Internal only

Most situations can be dealt with without going outside the organization. For example, you can bring undeclared conflicts of interest to the attention of the chair (if it involves a board member or member of a board committee) or the executive director if it involves staff or operational volunteers. You should be kept informed about what happens to your complaint, to the extent personal privacy permits. For example, as a board member, you do not have the right to know what discipline was applied to a staff person.

If you do not like how the situation was handled, you may want to give performance feedback, and consider corrective action within your authority. For example, if a board member dealt poorly with a conflict, you wouldn’t support appointing that person to an officer or committee chair role, and you wouldn’t recommend they stand for re-election to the board.

Summary and a systematic approach

I’ve outlined a few limited situations when authorities need to be notified, and other cases where you might consult external advisors or, if attempts to correct a situation fails, alert a partner organization. Note that none of these actions involve calling a reporter! There may be cases where you see no other options, but only as an absolute last recourse on a very grave situation.

However, there are many types of situations where you might perceive a problem and bring it forward within the organization, at a senior level, for corrective action. You can also take such occurrences into account in board assessments and executive director appraisals.

Remember that if it’s difficult for you to know how to deal with perceived wrong-doing, and take appropriate action, it’s much harder for an employee whose livelihood depends on the organization. Make sure you have safe ways for employees to seek advice and report issues, including when the issue involves their supervisor(s).

Good ethics reporting systems not only focus on advice (ask before acting) rather than just wrong-doing, but also encourage people to bring forward exemplary actions where other employees and volunteers have truly lived the values of the organization. Such employees can then be recognized for their ethics. If you don’t have such a system in place yet, consider it now.

Since 1992, Jane Garthson has dedicated her consulting and training business to creating better futures for our communities and organizations through values-based leadership. She is a respected international voice on governance, strategic thinking and ethics. Jane can be reached at jane@garthsonleadership.ca.

Because nonprofit organizations are formed to do good does not mean they are always good in their own practices. Send us your ethical questions dealing with volunteers, staff, clients, donors, funders, sponsors, and more. Please identify yourself and your organization so we know the questions come from within the sector. No identifying information will appear in this column.

To submit a dilemma for a future column, or to comment on a previous one, please contact editor@charityvillage.com. For paid professional advice about an urgent or complex situation, contact Jane directly.

Disclaimer: This article is for information purposes only. It is not intended to be legal advice. You should not act or abstain from acting based upon such information without first consulting a legal professional.

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