Ex officios unearthed – Part 1

Many non-profit boards include people who, by virtue of their job or past role, sit as ex officio directors or committee members. This can include government representatives, past chairs, or the executive director. Typically these positions are named in the bylaws or board committee or position descriptions. Ex officios are considered non voting directors although this meaning of the term is not the original one.

Are ex officio positions on boards an old idea we should let go of? Are there benefits of ex officio involvement on one’s board? Little has been written about the expectations of ex officios or what standards of performance ex officios should themselves aspire to. I intend to help fill this gap a little. In particular, I want to bring to light the value of certain kinds of board connections to the wider community that external ex officio directors, among others, can provide.

The focus here will be on brushing the dust off external ex officios, those who inhabit unappointed and unelected positions around the board table from outside the organization.  In a later post, Part 2 of a series, I will take measure of the common practice of board structures with internal ex officio roles built in. Most often this has to do with committee membership.

When in Rome…

According to the definition in Wikipedia, an ex officio is a member of a body (a board, committee, council, etc.) who is part of it by virtue of holding another office. The term is Latin, meaning literally “from the office”, and the sense intended is “by right of office”. There terms use dates back to the Roman Republic, Res publica Romana, from 509 to 27 BC.

Despite the original meaning of the word, it has come to be understood that any person in an ex officio role is also a non-voting director or member. For example, one often sees “ex officio” next to the name of the CEO or executive director on a board list. A lawyer would say that the CEO is ex officio and non-voting.

There can be confusion too about using the term to designate a special symbolic category of organizational or board membership.  Ex officio probably should not be used as honorary title as in a “lifetime director”.

External ex officios, the main focus here, are board positions created regardless of who inhabits them. They are permanent guest places set around the table. In some ways they are representative positions, although seldom is the person at the table formally appointed by an outside body. When a ex officio director leaves, his/her successor assumes the board post.

Jurisprudence

The legal landscape concerning non-profit incorporation and the role of directors is beginning to change and one of the areas of change affects the use of the term “ex officio director”.

For example, under the relatively new, Canada Not-for-Profit Corporations Act of 2012, ex officio directors are not permitted. A person, the Act says, must be elected in order to be considered a director.((See Joel Secter, “Working Around the Ban on Ex Officio Directors”, Articles, Deache-Aptowitzer LLP, April 30, 2014)) This will not affect most organizations since non-profits in this country are, by and large, incorporated under Provincial statutes.

In the USA, California’s corporation laws changed in 2015 prohibiting non-voting directors. According to Gene Takagi of the NEO Law Group, persons entitled to attend board meetings but not to vote can no longer can be listed as directors. The use of the term ex officio in referring to the executive director’s position may also be prohibited.((CalNonprofits, “New Law as of January 2015, Non-voting Ex Officio Board Members Prohibited”, California Association of Nonprofits))

 Modern day ex officios

In Canada, and in other jurisdictions, external ex officio members on boards often include:

• A municipal councilor or the municipal recreation staff person for a district on a community centre board.
• A provincial government department representative on a social services agency board
• Federal and provincial representatives on a regional economic development agency board.

Ex officio posts like these exist because the non-profit has, at some point in its history, seen benefit in having certain external representatives close.  Usually these positions are put in place when the organization is formed. The ex officio position might be a representative of a founding or sponsoring body. The posts tend to continue, as a structural fixture, often until the organization named indicates it is no longer interested in being involved in this fashion.

Ex officio positions exist too because government departments, often an agency’s funders, ask to have a presence on the board. It has been thought that this mechanism was a good way to ensure more service delivery and financial accountability. There has however, been a general trend away from having funders on non-profit boards, in part because governments have looked to other accountability mechanisms.

It may be worth noting that because external ex officios are positions not people, ex officio directors need not be members of the non-profit society or association even though they are members of the board. This may be an important consideration in some circumstances.

Ex officios with issues

Ex officio positions are not without their problems. Some directors would accuse those who sit in such positions of not showing up regularly enough to contribute effectively to ongoing board deliberations.  From a board dynamics perspective, people in ex officio roles are sometimes perceived as paternalistic or detached in their conduct. The biggest problem however, is the potential conflict of interest that can occur because many serve in a similar capacity on other boards whose organizations may have competing interests.

A closer look often reveals that ex officios are of great value to an organization in providing in-kind resources and the expertise of their office as well as insuring better coordination of programming across the community

Ex officios in practice

Non-profits with external ex officios board members, or agencies considering adopting the practice, will want to examine it closely. Here are some questions you can pose should your board, or you as an ex officio, want to reflect on the position and perhaps improve its value to the organization.

1. What are the intended benefits to the organization and external body?
2. What are the ex officio’s responsibilities at a governance level specifically?
3. Is the ex officio’s commitment to attend board meetings the same as other directors and if not why?((Note: A board may want to be careful about having an ex officio in name only. This can involve a board position that exist to provide an automatic means, through the distribution of board minutes, to keep someone outside informed. This might be better done by a protocol on the distribution of board minutes. This is easier when minutes are not intended to be a confidential record of board deliberations, which is the view I take. See my two guides, one on board minutes, the other on in camera sessions))
4. What are ex officio’s responsibilities in connecting the organization with their office, its mandate and plans?

Getting an insider and outsider in one

An external ex officio is in some ways an insider and an outsider. They are an insider because they are seen as loyal to the organization and, from regular contact at the board level, familiar with its challenges. They are an outsider because they come without the weight of the duties and responsibilities of other directors and with the freedom to bring an external perspective to the board table.

Ex officio board members offer the board an opportunity to connect with stakeholders and the broader environment in which the organization operates. Boards can become fairly insular, especially when much of their focus is on managerial matters.  Potentially, and certainly so if this is the stated expectation, external ex officios can help boards understand the competition, client demographics, trends in government support, and public policy debates surrounding the organization’s work.

External ex officios can also help connect a board to the organization’s stakeholders, or a least serve as a reminder of the importance of these kinds of linkages. In a 1996 article in the Harvard Business Review, Barbara Taylor, Richard Chait, and Thomas Holland write about the importance of board or trustee – community linkages. They note however, that “close ties between the board and constituents unnerve CEOs who are determined to be the board’s sole source of information and fear that direct communication between trustees and stakeholders will weaken time-honored lines of authority.”  In response, they quote one board member who says “The closer I get to reality, the better I can sympathize with and help the CEO.” ((The New Work of the Nonprofit Board, Harvard Business Review, September-October 1996))

I am a great believer in the value of directors “getting out” more, of governance informed by intentional work away from the board table. This is unfamiliar territory for many boards. External ex officios can help cultivate a board’s external perspective. At the very least, boards should ask them for this.

Conclusio (Latin)

I started out thinking about external ex officios as a relic of the past. Given their potential I believe that these positions could be of help to modern-day non-profit boards. I intend to consider the idea of outsiders and board-stakeholder linkages in future posts.The next post will turn to the more frequent practice of designating board members and executive directors as ex officios on internal bodies. Stay tuned! Comments on these ideas and other examples of external ex officios situations are most welcome.