The Strauss Blog

Perception is Reality – Managing Conflicts at the Board Table

As an association management company, we advise boards of directors on many issues, including managing conflicts of interest. In an earlier article, Are You in a Conflict of Interest?, Geoff Powell addresses the broad elements of conflict of interest and how to manage them (he also includes references to association management tools on this topic). One of the challenges I see is not simply managing real conflicts of interest, but managing perceived conflicts of interest.

In Association Management, Perception is Reality

Unfortunately, when clear information is not available, members of associations may perceive conflicts of interest whether they are real or not. Like with other issues in life, a lack of information forces people to make assumptions which can lead to perception becoming reality.

To avoid perceived conflicts of interest, associations and their volunteers and staff need to work to avoid situations that will create the perception of a conflict. This can be easier said than done, and an outsider maybe hypercritical, even when proper steps are taken. Again, this is all about information.

As Geoff explains in his article, discussing and documenting conflicts of interest should be done on an annual basis. Documenting conflicts means that if a member or other stakeholder questions what they perceive to be a conflict, the board chair or association’s chief staff officers (executive director) can easily respond: “We were aware of ________” and “we dealt with by _________”. The amount of detail that needs to be provided to an inquiry will depend on the specific situation, but by outlining that the association was aware in advance and took appropriate action makes responding to an inquiry all the easier.

Obvious Conflicts to Avoid

In small professions or industries, avoiding real and perceived conflicts can be difficult and does take work. When a conflict arises involving a board member, the board chair should do more than ask them to leave the room for a vote on the matter. Instead, they should be asked to abstain from all discussions on the motion and to not discuss it with fellow directors outside of the formal meeting. The less contact that they have on the issues, the easier it is to explain, if asked, how the conflict was managed.

When a board or committee has to deal with an issue involving a director or volunteer’s family member or colleague, it is important to create as much distance as possible between them and the decision. While it may seem “fair” to ask someone to leave a meeting, or a committee for that matter, the closer a volunteer is to a decision that impacts someone close to them, the greater the possibility that questions may get asked.

Association volunteers are simply that -volunteers, and association managers and board chairs need to respect that. While the person in question may not immediately recognize a real or perceived conflict of interest, it needs to be pointed out to them and addressed, where possible, in advance. Do not allow a volunteer to participate in a meeting that discusses their family member or colleague and simply proceed to ask them to leave for the final discussion and vote. It is not reasonable to put them in that position, because by having them as part of the discussion it creates the perception of a conflict. Excluding them from the beginning ensures that the perception of conflict is avoided.

Document and Communicate

Not all conflicts can be avoided and for that reason it is important to identify, by asking, on an annual basis for board members to self-declare conflicts of interest. It is the role of the board chair to ask for these declarations and then to see that they are documented either by the board secretary or by the association’s staff.

When an unexpected conflict does arise, document the conflict and document how it was handled. If necessary be sure to communicate the conflict and how it was handled to all involved parties. Communicating can play a major role in removing the speculation of a larger conflict or the lack of action to mitigate the conflict.

Steps to Avoid Real and Perceived Conflict:

1. Avoid
2. Document
3. Communicate

By taking these three steps, association volunteer leaders and the staff managing associations can keep concerned stakeholders from turning a well-managed situation into a nightmare for all involved.