Explainer: How to get non-profit governance back on track

When local non-profits fall apart, the whole community suffers. Executive directors and board members share how to support non-profit governance long term.
Downtown Nanaimo street shows Literacy Central Vancouver Island.
Downtown Nanaimo is home to a number of essential services delivered by non-profits. When governance falls apart, the whole community suffers. Photo by Rae-Anne Guenther/The Discourse

Over the years in Nanaimo, a handful of non-profits have devolved into various levels of dysfunction. Although this is not uncommon within non-profits or businesses, the impact a governance crisis can have on an organization operations is immense, leaving devastating gaps in support for the community. 

One recent example is the collapse of the Society for Equity, Inclusion and Advocacy (SEIA) Society, which was formed through a merger of two long-standing service providers, Nanaimo Citizens Advocacy and the Nanaimo Women’s Centre. The organization provided vital services for community members impacted by systemic barriers, including hosting the only warming centre in Nanaimo. 

In 2021, the non-profit society closed its doors after publicly announcing an alleged theft from within the organization. SEIA is now permanently shut down and all clients are being directed to other organizations, according to an archive off its website, last updated in December 2021.

Local non-profit Literacy Central Vancouver Island’s (LCVI) faced its own challenges in 2018 when executive director Rebecca Kirk challenged her dismissal in court. According to public court records, the former leader’s “deliberate actions significantly impaired the ability of the Board to function and carry out its obligations.” The aftermath of this conflict created mistrust and a lack of communication within the organization.

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Over the last few years, Haven Society, which supports women and families, has experienced a breakdown in communication and transparency between staff and the board of directors, causing high employee turnover and disengagement, according to past employees and other sources close to the organization. 

“Boards are there to support the frontline workers who are there to support the people they’re serving,” says K. Louise Vincent, who serves as a consultant to review non-profit governance. “If the board gets derailed or starts serving the board members, rather than the clientele or the staff, the community suffers.”

Although these organizations have experienced unique challenges, experts say a common fault is a lack of transparency between the board, staff and the community it serves.

The Discourse spoke with executive directors and past employees of local organizations to learn more about the common forms of non-profit governance breakdown and ways to improve a society’s long-term success.

How are non-profits governed?

Within every non-profit organization is an executive director and board of directors ensuring the society is serving its community according to its mandate and values. 

More than 30,000 societies in British Columbia are governed by the Societies Act, which was introduced in 2016

The regulations outline everything from annual general meetings to bylaws to reporting minutes. In 2021, the act was amended to create greater clarity as a response to feedback received about the initial act. 

Although every non-profit follows the laws of the Societies Act, the rules are very general. This may be partly due to the range in size and type of work non-profits do. Boards have the freedom to shape how an organization operates, which can create prosperity or open them up to conflict. 

There are two types of boards; a working board and a governance board. A governance board is the most common among non-profits in Nanaimo. Its function is to ensure a society’s bylaws and mandates are being followed while not being involved in operations. 

Nanaimo Family Life Association (NFLA) program participants gather around wildflowers at Bowen Park in the spring forest by the water.
Governance makes Nanaimo Family Life Association’s seniors’ programs possible. This spring, seniors enjoyed a group outing at Bowen Park. Photo courtesy of NFLA/Facebook

Build a diverse board of directors

A governance board is comprised of an executive director and elected board of directors. Every director must be a member of the organization and usually serves in a volunteer capacity. 

The executive director is a paid position. They are usually hired by an interview panel of staff and board members. The executive director reports to staff and the board and can be fired by the organization. Meanwhile, the board of directors do not have a “boss.”      

“When you have a governance board that starts to step into operations, shuts down the executive director, and not consulting the staff in terms of what the actual best practices are, that’s when you’re going to build a dictatorship with absolutely no accountability,” says Deborah Hollins, executive of the Nanaimo Family Life Association (NFLA). “The executive director is accountable to staff and the board, but the board of directors are not accountable to anyone.” 

Purposefully selecting a board of directors can be one of the first steps to ensuring a functional governance system in a society. “Non-profits have to really be diligent in how they train their board, how they relate to their boards, and how they choose their board of directors,” says Hollins. 

Nanaimo Family Life Association, which supports individuals and families in all stages of life in accessing counselling, employment skills and housing, models a good practice for recruiting members by advertising what skills they are looking for in a candidate instead of a general callout for board members. 

“What we’re trying to do on our board of directors is to look for diverse experience,” says Hollins. “We look for people with lived experience and we look for people from different backgrounds.” 

Candidates go through a series of interviews to learn about the role and if they would be a good fit in the organization, Hollins explains. “For people we want to spend more time getting to know, we might ask him or her to come on to a committee for a year and try that role out first.” 

At the Tillicum Lelum Friendship Centre, executive director Grace Elliott-Nielsen says the organization purposefully has a youth and an elder sit on their board. “The elders are beneficial because they have a lot of wisdom, culture, tradition and history. It’s important for the rest of the world to know that history.”

The Societies Act states that while a director on a board must be 18 years old, they can be 16 or 17 in special circumstances.

 “A young person brings forward ideas of what is the greatest need in the community right now for youth,” she explains. 

Often these youth board members will go on to work in education or social services later in life.  Elliott-Nielsen recalls one past youth board member who went on to serve on the national board for the Friendship Centres across Canada.

Ensure committees work for the whole   

The board of directors should create at least three committees to ensure accountability, says Samantha Letourneau, former executive director of Literacy Central Vancouver Island (LVCI). 

“Societies technically should have a governance committee, a human resources committee and a finance committee. Those three committees are crucial for the success of a society and to make sure that the society is equitable and respectful of who is working there,” she says. 

Implementing a human resources and governance committee helps create a failsafe if problems arise with the board or staff as there is a safe place to voice concerns and ensure protocols are being properly followed. 

Although these three committees, or more, are recommended in each society, there is no mandate by the Societies Act to have any. Due to the size of a society and the number of board of directors, multiple committees may not be practical. 

The awning of Literacy Central Vancouver Island is shown in downtown Nanaimo on a fall day from street level.
Literacy Central Vancouver Island has persevered as a non-profit since 1990. Photo by Rae-Anne Guenther/The Discourse

Build an inclusive membership

Just as corporations have shareholders, non-profit corporations have members. The process of gaining new members and how members are then chosen to serve on the board is based on the individualized process of each organization, and can open the board up to dysfunction.

Because board members must put proposed changes, like new bylaws, to their membership for a vote, a general or special general meeting is required. But only members of the society can participate in those meetings, so if membership is tightly controlled, this could effectively control the organization.   

“If you are hand picking — if the board decides who becomes a member — then they just recreate themselves in their own image,” says a former employee of a non-profit in Nanaimo, who asked not to be named to safeguard future employment. “If boards don’t want a lot of oversight, they don’t really advertise to have members.”

Due to the freedom boards have to change bylaws, it can be difficult to rectify when things start going wrong. If a bylaw is passed that gives directors unlimited time serving on the board, for instance, or if a society chooses to not have a human resources committee, it could make it extremely difficult to remove a problematic board member or restructure the board completely. 

Support strong communication 

The relationship between staff members and the board can be the pulse to a non-profit organization. By listening to staff members, the board of directors can make informed decisions related to bylaws, funding opportunities or programs. This collaborative approach ensures the organization is relevant and responsive to its clients.  

 “The people who know what’s happening in the community are the ones on the front line; the women on the crisis line at the house answering calls; the people in victim services that are sitting with women who have experienced just being drugged at a bar,” says a former employee at Haven, who asked not to be named to safeguard future employment.  

In years past, the board of directors at Haven invited an employee representative to meetings to gain insight on what clients’ needs were. Employees are no longer welcome to attend meetings, according to people close to the organization. 

Support staff and board members 

At Tillicum Lelum, a number of previous employees have volunteered to sit on the board as a way to give back to the organization. Elliott-Nielsen says this has proven to be an immense benefit as the board has an in-depth understanding and appreciation for the work the organization does for the community. 

Elliott-Nielsen points out that Tillicum Lelum Aboriginal Friendship Centre is recognized nationally for its innovative programming and high employee retention. “I always say we can’t get too bureaucratic, because if you start to become too bureaucratic and talk and act like a bureaucrat, you don’t keep your staff,” says Elliott-Nielsen. “When you come here, this is like your family.” 

The organization recently saw a board member retire from her position after decades of service. Some societies argue that a cap on years of service on the board is essential to ensure fresh perspectives are constantly moving in and people don’t become too entrenched in their ways of thinking.

For Tillicum Lelum, they do not have a bylaw for years of service on the board, however, this model seems to work well for the organization. 

A close of up hands beading a medicine wheel.
Strong governance makes NFLA’s seniors’ programs possible, such as this session with Connie Paul on Indigenous culture and beading. Photo courtesy of NFLA/Facebook

Get to the root of power

One of the strengths and weaknesses of non-profit societies is that board members serve as volunteers. This keeps non-profit costs low while ensuring people are passionate about the work. 

When I brought this up with Vincent, she suggested some people drawn to these positions are seeking power from a place of feeling powerless. “They assume they will feel better if they think they’re in control. Instead, it actually replicates the trauma,” she explains. 

Elliott-Nielsen acknowledges this perspective too, and aims to bring on board members who are willing to work on themselves. “I always bring forward, are you willing to do some personal work around how you actually do work? How do you feel about anger issues, or how do you work when stressed,” she asks. “I always have said that we will do everything to support you, but if you do not believe that you have issues you have to work with, how can you bring anyone else along to a place of health?”

Recently, NFLA staff and board of directors went through a decolonization training session offered by Indigenous elders. “We wanted them to do the training together to build up that relationship with one another,” says Hollins.

Nanaimo Family Life Association (NFLA) program participants gather on Saysutshun in August of last year.
Nanaimo Family Life Association (NFLA) program participants gather on Saysutshun in August of last year. Photo courtesy of NFLA/Facebook

How can a governance board be put back on track?

Within every society, there will at some point be dysfunction. How and when the organization responds to it is the line between rebuilding or dismantling. 

Organizations that seek out support before issues become major will have greater success at bouncing back or even preventing it from ever getting to that point. 

“What a healthy organization does is hire a skilled consultant to come in who is neutral and engages everyone equally in that review,” Vincent explains. 

LCVI’s Letourneau says her predecessor did an exceptional job rebuilding trust after the fallout, and during her time as executive director Letourneau also established better governance practices. 

“When I came on, I had discussions with the chair asking, ‘What do we need on our board? Where are our strengths? Where are gaps?’” she says. 

They also reviewed their bylaws. Since every organization must create its own bylaws, it becomes the responsibility of the society to craft clear regulations that ensure effective governance. 

One new bylaw LCVI created was the whistleblower policy to protect staff members from speaking up if they have concerns about the governance board. 

When Tillicum Lelum began expanding quickly, Elliott-Nielsen says they hired a consultant to review their policies and make recommendations.

“We redid all of our policies for the whole organization, which was a really good thing to do. I’ve seen so many organizations grow fast and then they start to fall apart because they don’t have the policies in place to support them.” 

Letourneau adds that when there is a break in the relationship between staff and board, it is essential to have a third party give some guidance on next steps. For this to happen though, the organization needs to be in alignment on bringing in a neutral party for support. 

If that option is not possible, a more public and potentially costly approach is legal action. Members can also bring concerns to the press to publicize the dysfunction, or create a protest at an annual general meeting. 

According to the Societies Act, an annual meeting must be held once a year, and the directors of a society may at any time call a special general meeting. 

Any special resolution — a motion to create a bylaw that will have particular significance to the structure or ethics of the society — must be included in the text of a general meeting notice. 

The drawback to going public is the mistrust it can create, says Letourneau. “When there’s conflict within a non-profit, and it becomes more public, then there’s work that needs to be done to rebuild relationships in the community as well.”

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