Why integrity is essential for board members
For too frequently, it seems to me, your read about the loss of trust between board or committee members. The latest episode to catch my eye, relates to the Wellington City Council. The Post headline says it all “Five city councillors investigated over meeting leak”.
Here’s my take on the importance of integrity.
Various principles and standards, usually called board ethics, guide the behaviour and decision-making of the board members of a not-for-profit organisation. Every member is expected to follow these ethical guidelines to ensure the financial and operational affairs of the organisation run smoothly.
Integrity is an essential component of board ethics, and the following detailed guide explains why I believe it must be consistently upheld throughout the organisation.
Not-for-profits are established to fulfil a specific purpose or mission. By practicing integrity, members prioritise the organisation's interests above personal agendas. They demonstrate a commitment to advance the organisation's cause, something that's crucial for all mission-driven bodies.
Board members are the stewards of the organisation's goals and resources. Without integrity, it's difficult to maintain the trust of the chief executive officer, members, sponsors, donors, suppliers, and volunteers. Typically, stakeholders will be confident in the organisation's leadership when board members act with integrity.
Integrity helps foster accountability not only within the board but throughout the organisation as well. It's common for board members who act with integrity to take responsibility for their actions and hold themselves and their colleagues accountable for meeting the organisation's targets.
The board oversees the organisation's finances. Integrity is vital to ensure financial resources are managed honestly and transparently. Financial integrity is required to prevent fraud, funds misappropriation, and other issues related to financial mismanagement.
Not-for-profits thrive through public trust, which can only be achieved through trust. Board members who value integrity promote honest and open communication, sharing information with stakeholders as required. Such levels of transparency boost the organisation's credibility.
Not-for-profits must meet various legal and regulatory requirements. Board members should observe integrity to ensure the organisation adheres to these laws. It reduces the risk of legal issues and prevents jeopardising the not-for-profit's tax-exempt status.
Like in other organisations, disagreements can arise within not-for-profit boards. These conflicts can only be fairly resolved when members act with integrity, always ensuring that decisions are based on the organisation's best interest rather than personal biases.
Donor and sponsor confidence
Donors and sponsors want a guarantee that their contributions will be managed responsibly and used for the right purpose. Can this be achieved without integrity? Boards and their members act with integrity build donor and sponsor confidence, ensuring they continue financing or contributing to the organisation's activities.
The Bottom Line
Integrity is super crucial for ensuring effective not-for-profit board leadership. It allows board members to put the organisation's interests and mission first, fostering transparency, trust, and accountability while safeguarding its reputation.