Know the Facts about Your Role on a Volunteer Board of Directors

It’s important to understand the duties involved before you agree to serve on a volunteer board.

 

 
 
 

Allison J. Bloom, Esq. | | Thursday, August 30, 2012


Recently, a friend named Joe told me he’d been appointed to his volunteer ambulance association’s board of directors. Joe is an excellent clinician, graduated near the top of his EMT class, knows his protocols inside out, and always puts his patients first. Joe loves being an EMT and someday wants to become a paramedic and chief of his service.

As I spoke with Joe, I sensed his frustration. Serving on the board of directors wasn’t at all what he expected. “I was told this board of directors’ thing would be easy… they said I would be helping to run the service and that it would put me on the ‘fast track’ to becoming chief,” Joe said. “But, all I ever do is go to boring meetings where I spend hours listening to people shoot down all my ideas and make excuses for why we can’t buy new stuff. The board isn’t ‘running’ anything, and I spend so much time attending meetings that I barely have time to go on ambulance calls. What did I get myself into?”

Defining Leadership
Much has been written about leadership over the years. Most of the time, however, the focus is on operations. In other words, what it takes to be a good and effective captain, supervisor, operations manager, or chief. But, little to no attention has paid to the “brains behind the operations” of EMS and fire organizations: the board of directors.

That is, at least, until last November at the American Ambulance Association convention in Las Vegas, when Nancy Axelrod, a well-known governance consultant who works with a multitude of nonprofit organizations, gave a powerful and insightful presentation on volunteer board leadership roles.

Axelrod, who describes herself as a “board anthropologist” (i.e., someone who studies the “tribal rituals of boards and nonprofits”), spoke extensively about the key roles and responsibilities of board members and the hallmarks of an effective board of directors.

General Duties and Responsibilities of a Director
Anyone serving as a director of a corporation must be aware of what a director is—and isn’t. Unlike an operations position, which manages the day-to-day workings of an organization, the board of directors is all about leadership and governance. “Leadership” is the act of leading a group or organization, while “governance” is the actual framework of rules and practices which ensures accountability, fairness, and transparency in an organization’s relationship with its customers, management, employees, government, and community. “Management,” on the other hand, is the act of supervising the implementation of the rules, practices and leadership vision.

As a body, the board of directors has considerable powers and a great deal of responsibility. The board of directors sets the direction, mission, tone and strategic vision for an organization, all of which must be done in keeping with the board’s fiduciary duties of obedience, care, and loyalty.

A director, on the other hand, has almost no power acting alone. Directors are just one participating element in the board of directors, which collectively directs, but does not perform, the organization’s activities. Corporate actions, as determined by the board, are then carried out by the organization’s officers, employees, and agents.

Joe told me that his service has a lot of problems with ‘frequent flyers’—those people who routinely call an ambulance for minor or chronic problems. At the last board meeting, Joe proposed the service buy a taxi cab and start a taxi division. “We could make a ton of money on cab fares, especially since many of the ‘frequent flyer’ calls don’t get reimbursed by insurance. But, the board wouldn’t even consider it—they said the association’s purpose is to provide ‘non-profit emergency medical care and transportation.’”

The Duty of Obedience requires board members not to engage in acts that are beyond—or outside—the scope of the organization’s powers, as set forth by the organization’s charter and applicable law. For example, an organization whose purpose is to provide emergency medical care could not, without violating its charter, open up a retail clothing store. The legal accountability and responsibility to uphold, within the bounds of the law, the organization’s purpose are some of the most important duties of a board member.

Although “frequent flyers” are a growing problem in EMS, Joe’s suggestion to start a for-profit taxi division is beyond the scope of the association’s purpose to provide non-profit emergency medical care and transportation. Not only would the suggestion provide financial incentives for association personnel to send patients to the hospital in a vehicle other than an ambulance, which would blur the lines of acceptable emergency medical care, but it could also violate the state’s regulations regarding appropriate ambulance transportation, as well as the state’s non-profit corporation laws.

“Who knew I would spend so much time attending meetings, conducting research and reading and writing reports … Ugh! It just won’t end. If someone had told me I would have so little time to work shifts on the ambulance, I would never have agreed to serve on the board. And, if I have to sit through one more endless budget meeting, I’ll just scream!”

The Duty of Care requires board members be informed about issues before making business decisions. This means that a board member must carefully consider all relevant information reasonably available, and when they make a decision, do so in good faith and with reasonable care. To do this successfully, a board member must exercise independent judgment and have adequate information, including if necessary, conducting their own research. Board members may also rely and act on information from sources that the board member believes are trustworthy, such as experts retained by the corporation (i.e., lawyers and accountants). As much as Joe may feel overworked and overwhelmed, he owes it to the organization to do his homework and perform the duties assigned to him. This includes attending meetings and being actively engaged in the deliberation process.

 “My girlfriend works for a medical supply company, and she offered my ambulance association a great deal. The discount is better than any of our current suppliers, and my girlfriend is offering it to our association only, simply because I am member. But, the board said ‘no.’ I don’t see what the big deal is. It’s a win-win; the association saves money, my girlfriend gets the business, and I reap the rewards from both sides!”

The Duty of Loyalty requires board members to recognize they serve the interests of the entire organization—not their own (or, as in this case, Joe’s girlfriend’s) personal interests. A conflict of interest arises whenever a board member has a personal interest—either directly or indirectly—in anything to which the corporation may be a party. Board members must be aware of the potential for conflicts of interest, know how to recognize them and be open and honest with the board about them.

Although conflicts of interest involving board members are not inherently illegal, the way in which the member and the board deal with the situation is what determines propriety.

Here, Joe clearly has a conflict. On the one hand, Joe wants to support his girlfriend in her job, and if she brings in business for her company, presumably she’ll stay employed. But, Joe’s statement that he will “reap the rewards” is definitely a red flag. It’s irrelevant whether he’s referring to a direct financial reward or some other benefit; the fact that he perceives he would personally benefit is enough. In this situation, although the board may have to pay a little more for supplies, it will avoid the liability that could go along with entering an agreement with Joe’s girlfriend’s employer.

Now Joe really didn’t understand why they asked him to serve on the board. “I thought as a board member, I would actually get to run the organization, but the board doesn’t seem to ‘run’ anything. I’m just an overworked figurehead.”

Board Performance & Effectiveness
A distinct line exists between operational management of a business and its corporate leadership. Unlike management, which handles the day-to-day operations, the board of directors sets the tone and direction for an organization; that is, it engages in strategic thinking and planning and provides oversight of corporation management. Although the board may (and should) listen to recommendations from its management staff, the board ultimately decides the mission and strategic vision for the organization and ensures appropriate resources through careful consideration, oversight and development of budgets and other financial matters affecting the organization, including hiring management personnel (such as an executive director or chief), and setting internal controls through the enactment of resolutions, policies and procedures, all while adhering to the principles of obedience, care and loyalty.

Historically, EMS organizations tend to promote personnel based on who the best field providers are or who has the most seniority, not on leadership abilities. Likewise, elections to boards of directors, especially in smaller organizations, are often based on popularity—not on how knowledgeable or committed a person is to serving.

Sometimes the organization doesn’t have a lot of options, especially if the organization is small, or people haven’t expressed much interest in serving on the board. Regardless, board members should never be viewed just as “figureheads” and service on a board is not simply as a “resume builder.” Board members must truly understand the organization’s mission and take time to learn both the focus and purpose of the board and the time and resources needed to serve before they accept the position.

Another challenge is that board members may have very different roles at their day jobs when compared to their roles on the board. For example, a person who is used to managing others will need to adjust to the fact that no one person has the power to make decisions on a board. This can be very difficult for some people to adapt to, and although it is not a reflection on them personally, people who are unable to adapt to the role of a board member as a team player should probably be asked to serve the organization in another capacity better suited to their strengths.

The “Right Fit”
Although you may think you know your organization well, Axelrod recommends asking the following questions if you are considering serving on a board.

  • What is the “tone at the top”? Is it strong or weak? When it comes to leadership, having a strong leader is critical, and this is especially true when it comes to board leadership.
  • What is the social fabric of the board? The social fabric of a board, especially how the board makes difficult decisions, can be extremely telling. For example, do younger members of the board consistently defer to the older, more senior members when difficult questions or problems arise, even when the younger members have the votes to overrule the older members? A board that operates under the principle of “we’ll do it this way because that’s the way we’ve always done it” is both a liability for its members and a recipe for disaster.
  • Does the board have good, thorough meeting minutes? In other words, can you figure out what the board has been working on? And, can you tell what was agreed upon and/or voted upon in the past?
  • What are the board’s accomplishments? A successful and healthy board of directors must have a good strategic plan, and a clear mission and vision.
  • What is the retention rate? One of the biggest challenges for volunteer associations is that, because of high turnover, it’s a constant challenge and process to cultivate good board members.
  • Does the organization provide a formal board orientation program for new members? Educating and providing a strong orientation program for new board members is extremely important. This is especially true for younger or inexperienced prospective and new board members, but it should be standard for any board member who is new to your board, regardless of their past experience.
  • What kind of diversity exists on the board? The more diverse the mix, the more angles and viewpoints that will be brought to the table. Blind acceptance is deadly. However, Axelrod points out that although the background and experience of board members will vary, it’s important that board members focus on the behavior of the board as a whole, not on any one member.
  • Who are the “people on the bus?” It’s possible to have competent people who don’t form competent groups. So take a close look at who comprises the board, not just for what they bring to the table as individuals, but also how they work together.
  • Is there a willingness to share information? People with similar opinions and views tend to gravitate toward each other and vote along the same lines. However, a “board within a board” is a recipe for disaster. If a core group consistently keeps important information to themselves, fails (or refuses) to communicate with other board members, or is able to move its own agenda forward because the other board members have been kept in the dark, that’s a huge red flag.
  • Are board members allowed to challenge each other? When it comes to resolving conflict, “people often listen to react, not to understand,” says Axelrod. Disagreement on a board needs to happen; it’s important, even necessary, but it must be done with humility and respect. In other words, constructive conflict is good; the greater danger is total agreement at all times.

“Wow … This board of directors’ thing is a lot different than I thought it was … I wish someone had told me all of this before I agreed to take the position …”

Well Joe, if according to Axelrod, you have “a well-developed sense of humor and a ‘tolerance for ambiguity,’” in addition to adhering to the principles discussed above, you can be a highly successful board member and serve your association well. Although it may not be the “fast track” to chief that you thought it would be, the experience of serving on a board will serve you well in the future. After all, Axelrod says, “a good board is a victory—not a gift.”

This article is not intended as legal advice or legal counsel in the confines of an attorney-client relationship. Consult an attorney for specific legal advice concerning your situation.




Connect: Have a thought or feedback about this? Add your comment now
Related Topics: Administration and Leadership, Leadership and Professionalism, Nancy Axelrod, management focus, board of directors, American Ambulance Association, Allison Bloom

 
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Allison J. Bloom, Esq.

Allison J. Bloom, Esq. is an attorney in private law practice in the field of EMS Law. Her practice is focused on providing risk management and legal services to EMS and Fire agencies, concentrated around governance, legal and regulatory compliance, records and information management (RIM) compliance, and corporate and business law. Attorney Bloom has published numerous articles and lectures frequently on EMS legal topics. Contact her via e-mail at allison.bloom@abloomlaw.com

 

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