Responsibilities of Trustees Cited

Boards of Trustees exist to be a focus of ownership and a mechanism of governance. If the body being governed has paid staff, the separate function of management is in the hands of a chief executive officer, who reports to the board. Where the board manages or the staff governs, the organi­zation is in trouble. What a trustee is and does and what he is not and should not do is a subject skimmed lightly below.

1. Trustees establish goals and policies; they do not implement except where staff is short. When they do imple­ment, then trustees perform as subordinates to the chief executive officer, subject to his direction and accountable to him, not the board.
2. Trustees assume full responsibility for the organi­zation, a function they cannot delegate to an executive or escape in any way. Absence from a meeting when a decision is made, for example, does not excuse the absent director from his personal responsibility for the consequences of a decision reached in his absence.
3. Trustees hire the chief executive, define his duties, ensure that he has the means to discharge his responsi­bilities, evaluate his performance and remove him when appropriate. While he is in charge they avoid the sin of “snoppervision.” They remain inaccessible to other em­ployees, unless referred by the chief executive. They do not issue orders or make suggestions to employees except through the chief executive.
4. Trustees are a force only when they sit en bane. None, including the chairman, is authorized to make a de­cision personally (except in an emergency), to issue an order to anybody, or to speak for or in behalf of the organiza­tion, except when given instruction by the board so to speak.
5. Trustees, as a matter of law and of ethics, are re­strained from dealing with themselves as purveyors of goods or services. Pennsylvania law on conflict of inter­est is presently in flux, but S-169 will, if enacted, change the law. From 1939 until 1972, the Penal Code made it a crime for a director of a nonprofit corporation that re­ceives money from the State to sell goods to his institu­tion. S-169, or a successor bill in a later session of the Assembly, will modify the old Penal Code. While the industry awaits the decisions of the legislators, the Non­profit Corporation Act seems to govern. It permits contracts in conflict of interest if the material facts are disclosed, the contract is authorized in good faith and the contract is fair. Ethical considerations, however, raise the duality or conflict issue to a higher plane. The wise director discloses his interest, removes himself from any meeting where a contract is being considered for the sale of either goods or services, and refrains from voting. An even wiser course for the director is to refuse to sell to his organization under any terms whatsoever, even where he is prepared to forego his normal profit. To do otherwise is to risk misunder­standing on the part of the constituency of the organiza­tion.
6. Trustees know that committee meetings and the board room are the place for discussion, and the time for debate is before a decision is reached. The director who has been on the losing side of a vote, after the decision is made by the board has a duty to support the voice of the ma­jority. His recourse, if he is not satisfied, is to resign first and then express his opposition.
7. Trustees have a duty to educate themselves to their mission, to remain current concerning the workings of their agency, and to seek information about new develop­ments in the field. When the trustee finds himself lagging in his interests he has an obligation to resign, even before he is rotated off the board. If the organization is to have pro­gress with purpose, then he will not stop that progress but step away from his fiduciary responsibilities and into the community. His contribution can continue as a former director; his extra contribution will be that he has made way for new directors with the requisite amount of vigor, zeal, enthusiasm and optimism which the organization deserves to have evident among its governors.

Robert Grant Crist is the Vice President of Pennsylvania Federation of Historical Societies.