Boards not accountable for anything?
Updated: Sep 20, 2021
During a public meeting, some colleagues I really respect discussed a board’s lack of accountability. I think the words were "boards are accountable for nearly nothing." The colleagues consulted with an attorney who supported this position. Well, I cannot concur. Think about Wells Fargo. Think about the Wounded Warrior Project. Ultimately, the boards were accused of not fulfilling fiduciary duties under the law. In 2015, a board of a home for the aged was found liable for not fulfilling its fiduciary duties. On appeal, the $2.25 million punitive damage award was vacated. But the board got itself in trouble because it wasn’t paying attention. Because it wasn’t paying attention, a private college foundation board came under scrutiny from the community served. Even very small nonprofit boards can be sued. For more on how a board determines its accountability, listen to a discussion from the Xylem Group.
If you want a scholarly review regarding what a board is accountable for, go here