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Lessons from Penn State – Not-for-profit Board Responsibilities

November 28, 2011

What are the lessons non-profit boards can learn from Penn State?

In my mind, there is no failure in the management of a not-for-profit organization more colossal than the Penn State Football case. There are numerous lessons not-for-profit boards and board members can learn from this.

Although the situations about which this case is concerned go back to the late 1990’s, serious errors in judgment were made by senior university management personnel as to how to handle critical information regarding the organization. What is missing in the Penn State case is board’s role in overseeing these judgmental decisions. Keep in mind that the board can only review what is brought to its attention. This point being the lesson all board members should learn from this tragic case.

At most board meetings there is an Executive Director’s Report during a portion of the meeting. This report to the Board should cover all things going on in the organization, the good, the bad and the questionable. Too many organizations operate under the assumption that the only items discussed at a board meeting are the items requiring a board vote. This is not a good policy. Consider what would have happened if the Penn State board had been made aware of what was taking place at the University and how the University was handling them. The probability that the University would have continued down the wrong path would have been substantially reduced if the board was made aware of the situation.

At your board, consider adopting a policy of an all-inclusive monthly Executive Director’s report. This strategy will increase the success of reporting major organizational problems and assure all situations are being properly addressed by management. As a board member of a Not-for-Profit organization remember, you have the responsibility to make sure the organization is operated with the highest regard to best business practices, this includes operating with integrity in every situation.

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