Nonprofit Board Member Removal: A Dilemma For The National Endowment For Democracy

Working with nonprofit organizations, I deal with a LOT of people problems. And it makes sense, right? When you ask a group of people passionate about a cause (aka, the board of directors) to come together to make collective decisions…disagreements and confrontations are inevitable.

I work with all my clients to put together solid governance standards and practices to try to help them move past these interpersonal issues as smoothly as possible when they do come up. But sometimes, there is no easy resolution for board member disagreements. When it comes to the point that it harms the nonprofit and gets in the way of pursuing the mission, it may be time to take serious action  - ejecting the board member(s) causing the problem. That’s often when I get brought in - when it’s time to consider removing a board member from the nonprofit board of directors.

How to Legally Remove a Board Member

If you’re at the point of considering kicking someone off the board, things are obviously not going well. But what are the next steps? It depends on a few things – specifically, what’s in the organization’s bylaws and what state nonprofit laws say about board member removal.

In my home state of Minnesota, the nonprofit statute states that a director can be removed “with or without cause” by the majority vote of either the voting members (if the org has them) or by the remaining directors. This only applies, though, if your governing documents say nothing about removal. This is a failsafe. The organization’s bylaws should outline the criteria and process for removing a board member, and plenty of organizations bake in extra steps and requirements to remove someone from the board of directors.

When I’m working with my clients on their bylaws, I always recommend that they keep the process as loose and flexible as possible. Follow the state law, but don’t make it any harder on yourselves to remove someone than it needs to be. Many organizations make it overly complicated to remove a board member, thinking “if this was me, I’d want all this due process.” But the reality is, if you’re trying to remove someone, then it’s likely things are contentious enough that you need to just get it over with. At that stage, the last thing anyone wants is to jump through a bunch of hoops to do it.

But here’s the thing – even if you have the votes to remove a director, there’s more to it than just “what’s legal.”

The Optics of Board Removal

A lot of the time, when I’m helping a client through a board removal, most of our time isn’t spent on figuring out the legal procedures. Instead, it’s usually all about the motivation behind the removal and figuring out the optics of the situation. Working through the issues first instead of rushing to remove is always the better course of action. Consider:

• Will removing this director help the board to better pursue the mission?
• How will your internal and external communities react to this removal?
• Is there another way for this person to leave the board? Would they step down willingly or choose not to renew when their term is up?
• What is our plan for communications and public relations after the removal?

Let’s be real – the optics are usually more important than the legal procedures for removing board members. Here’s an example that’s playing out in the news right now, in 2022.

National Endowment for Democracy - Board Disagreements

Elise Stefanik is the Congresswoman from New York’s 21st District, and she sits on the board for the National Endowment for Democracy (NED) – a nonprofit that promotes democratic institutions around the world. She’s been the center of some major conflicts among the board and staff at NED.

Why?

While Stefanik promotes democracy overseas through her work with NED, in her capacity as a congressperson she voted to overturn the 2020 presidential election and spreads misinformation and conspiracy theories about elections here in the United States.

After Stefanik voted against certifying the results of the 2020 election, staff members at NED circulated and signed a petition to remove her from the board of directors, saying “It is our desire to know how it could be possible that Representative Stefanik will remain part of the NED board of directors following her abuse of office in ways that contradict NED's core values in the starkest terms, and what steps will be taken to resolve this contradiction.”

This is looking pretty bad for Stefanik to keep her board seat, right?

The NED board put out a statement condemning the attempted January 6 insurrection, but ultimately, they chose not to remove her from the board. Instead, they actually renewed Stefanik for a second term of board service, and she even gave a speech and presented the 2021 Democracy Award at a NED event in October.

Choosing NOT to Remove a Board Member

Can you picture what a difficult situation this was for executive leadership and the board to wrestle with? A staff petition – ouch. I can only imagine the conversations behind closed doors as the NED board members had to make this decision. Clearly, there’s a certain percentage of the folks on staff and on the board who believe that Stefanik’s actions and beliefs directly oppose a pro-democracy mission. On the other hand, NED is steadfast in their desire to be non-partisan and have a balanced board with both Republicans and Democrats. They also clearly did not want to have a governance matter become political.

In a situation like this, you have to weigh the pros and cons – because there are both, no matter what you do. Is it more harmful to the mission to keep Stefanik on the board, or to remove her and potentially jeopardize their non-partisan reputation? Even if they could legally remove Stefanik, it’s a lot thornier of a question to consider whether they, as fiduciaries of the nonprofit and stewards of their mission, should remove her. The public opinion and press around either decision has real impacts for the nonprofit and their ability to deliver their mission.

While this is an extreme example with national coverage, this is true for all nonprofits considering a board removal like this. Even if you’re not getting national press, what matters is how YOUR community perceives these actions. Whether it’s drama amongst your membership, posts on social media or an opinion piece in the news, bad press can hurt the nonprofit for years to come.

So, no matter the situation, if you’re facing the potential removal of a director, here’s my parting message: It’s not just about the legal procedure when it comes to people problems and board removal. Considering all the issues, rationally and not emotionally, weighing the optics, and remembering your fiduciary duties all matter. It’s down to the board to handle the situation as smoothly and professionally as possible. And that means bringing in professionals who can help bring some objectivity and calm to what is usually an emotional process. Don’t go it alone!

Jess Birken is the owner of Birken Law Office, a firm designed to help nonprofits. Ideal Client Engagements are nonprofits looking for a strategic partner who will give pragmatic advice and keep business operations on track so the mission work stays a priority.

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