BOARD CAFE
The Newsletter Exclusively for Members of Nonprofit Boards of 
Directors
Short enough to read over a cup of caffe latte, the Board Cafe 
offers a menu of ideas, opinion, news, and resources to help 
board members give and get the most out of board service. Co-
published by CompassPoint Nonprofit Services and BoardSource 
(formerly National Center for Nonprofit Boards). Chef / Writer: 
Jan Masaoka. November/December 2001. Vol. 5 No.10.  Ready-to-
print version at: http://www.boardcafe.org.
+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + 
Once I was on a board and was so unhappy with the new executive 
director that I decided to resign from the board.  I called the 
Board President to tell her I was leaving, and to my complete 
surprise, she said that nearly the whole board felt the same way.  
Since there had never been any disagreements or sharp words at 
any of the board meetings, I had assumed that everyone ELSE on 
the board was happy with the executive director.  The Board 
President had telephoned a few of the board members who had left 
before their terms were up, and she had been surprised to hear 
their dissatisfaction with the executive director.  That prompted 
her to call other board members who had the same sense.  A few 
months later, the executive director was fired, and she 
subsequently sued the organization for wrongful termination (the 
suit was settled at a low amount).  
This story links two of the topics for this month's Board Cafe:  
exit interviews for board members, and "What Every Board Needs to 
Do About Insurance."  Also an item on a terrific new book, and 
here's a link to Planet 501c3's "Meeting-Shortening Maneuvers": 
http://search.compasspoint.org/publications/~planet/cartoon_page.
lasso?id=34. 
+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + 
EXIT INTERVIEWS FOR BOARD MEMBERS
What does it mean when board members leave?  Corporations 
routinely hold exit interviews with departing employees and 
tabulate the reasons for the departures.  If there seem to be 
silent and/or disgruntled board members leaving the board, a 
series of short telephone exit interviews might reveal important 
reasons why.  Ask a former board chair, consultant, or another 
neutral person to do the interviews.  In many cases, departing 
board members reveal that they have left due to disagreements 
with the executive director or the board chair, or are disturbed 
about the overall direction of the organization.  
PRACTICAL WAYS TO REACH PEOPLE WITH DISABILITIES
Does your organization want practical, real-life advice on 
reaching people with disabilities?  A GREAT book,  Access Aware: 
Extending Your Reach to People With Disabilities, is now 
available from the Alliance for Technology Access with points on 
language (Say "She uses a wheelchair" rather than "She's confined 
to a wheelchair"), facilities ("Use the closed fist test for 
handles-to ensure that people with limited use of his or her 
hands can open the door") and more.  One of the board's jobs is 
to ensure that the organization's services are accessible to 
everyone . . . this straightforward resource will be helpful both 
to the board and to staff. Go to 
http://www.ATAccess.org/resources/acaw/acawinterest.html or call 
800.455.7970.  $45 for a printed manual and $20 for the PDF 
version (both include online access). 
 + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + 
Now for this month's "Main Course" at the Board Cafe:
WHAT YOU NEED TO DO ABOUT INSURANCE
By Melanie Herman, Nonprofit Risk Management Center
Not every nonprofit needs every type of insurance.  But every 
nonprofit board should consider its insurance needs and the 
resources needed to protect the good health and mission of the 
organization. We offer 8 tips on insurance issues to get you 
started.
1. Examine exposures first. Rather than start with looking at the 
current insurance policies, begin by looking at how your 
nonprofit is exposed to possible lawsuits and losses. While 
lawsuits against nonprofits are relatively uncommon, the most 
common types of suits against nonprofit boards are ones that 
allege wrongful employment practices (such as wrongful 
termination), sexual harassment, or retaliation.  Which of your 
activities are more likely to lead to lawsuits, damage to 
reputation, finances or property? 
2.  Make sure your organization is working with an expert it can 
trust. An insurance agent, broker or consultant can provide 
valuable advice and practical help on coverage for your 
nonprofit. Seek someone experienced with nonprofits, and familiar 
with the work you do (or committed to learning about it). Your 
advisor should live up to the promises he or she makes, give 
prompt and credible answers to your questions, take the time to 
understand your organization and seem genuinely interested in 
helping you. To avoid awkward situations, and to prevent a 
potentially dangerous conflict of interest, choose someone 
unaffiliated with your nonprofit. 
3.  Have an annual report to the board on insurance and risk. If 
you don't have a board Insurance or Risk Management Committee, be 
sure that insurance review is assigned to another committee, such 
as the Finance Committee or to an individual board member.  
Though insurance policy language can be hard to swallow, and even 
harder to understand, it's important that someone from the staff 
or board read the policy from beginning to end, including the 
policy exclusions, endorsements and definitions. 
4.  Read the laws.  Ask the Risk Management or Finance Committee 
to look at the language in your state volunteer protection laws 
as well as the federal Volunteer Protection Acts.  Remember that 
none of these laws provides absolute protection against suits 
alleging wrongdoing on the part of nonprofit board members.  For 
more information about the federal Volunteer Protection Act, see 
http://www.eriskcenter.org/docs/protection.cfm.  State laws 
differ and some states do a better job than others of informing 
the public; find the link to your state's laws at 
http://www.eriskcenter.org/docs/s_state.shtml.  
5.  Reduce risk as well as buy insurance. Just as car insurance 
isn't a reason to drive recklessly, nonprofit insurance is only 
one element in risk management.  The board should consider 
conducting a risk management audit, or simply identifying ways to 
reduce risk.  There may be simple ways to increase building 
safety, to improve personnel policies, strengthen compliance with 
personnel policies, improve performance evaluations, or to screen 
staff and volunteers more thoroughly. 
6.  Talk over the various types of insurance and do what you can, 
when you can. No single insurance policy covers all exposures and 
some are more important than others, depending on an 
organization's circumstances. For some, a property policy 
covering buildings and personal property against accidental loss 
is most important. In another organization, a policy providing 
protection for volunteer injuries may be of first import. If you 
can't afford all of the coverages you'd like your nonprofit to 
have, start with the policy you consider most important and add 
others when you can. 
7.  Consider Directors & Officers (D&O) liability insurance. 
While many suits against nonprofits are brought against the 
nonprofit corporation as well as individual managers and board 
members, in a few cases suits are brought solely against board 
members themselves.  Many small nonprofits don't buy D&O 
insurance simply because they can't afford it.  In other cases, 
the board may decide that the risk of a lawsuit is too unlikely, 
or that there may be other ways to finance defending the board 
and the organization.  Whether or not you have D&O insurance, 
there are board practices that reduce the likelihood of a suit, 
such as preventing conflicts of interest, recording "no" votes in 
the minutes, and ensuring that the organization's employment 
policies are consistently applied.  For more about D&O insurance, 
see http://www.genie.org and click on "Insurance" in the FAQ 
section.
8.  Test the market. Every three to five years consider 
"shopping" your insurance program. Invite several brokers or 
agents to submit proposals, or ask the broker to obtain bids from 
several insurance carriers. Doing so will give the board a basis 
for comparison and a sense about whether you're paying a fair 
price.  At the end of 2001, experts are predicting that insurance 
will become more difficult to buy, premiums will become more 
expensive and new exclusions and restrictions are likely to 
appear.  This might be a good time to consider changing to a 
different carrier or to review your overall insurance program.  
Related Board Cafe article: Sample Conflict of Interest Policy 
(January 2000) http://www.boardcafe.org/bc2000_01.html.
The Nonprofit Risk Management Center provides FREE technical 
assistance to nonprofits via telephone or e-mail. For more 
information on any of the topics covered in this article, visit 
http://www.nonprofitrisk.org or call 202.785.3891. 
+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + 
You are reading the BOARD CAFE, published monthly by CompassPoint 
Nonprofit Services and BoardSource (formerly the National Center 
for Nonprofit Boards).  CompassPoint: 706 Mission Street, 5th 
Floor, San Francisco, CA 94103; (phone) 415.541.9000; (fax) 
415.541.7708; San Jose office: 1922 The Alameda, San Jose, 95126; 
(phone) 408-248-9505.  (e-mail) boardcafe@compasspoint.org 
(website)  http://www.compasspoint.org.  BoardSource: 1828 L 
Street NW, Ste. 900 , Washington, D.C. 202.452.6262 website 
http://www.ncnb.org  We welcome your comments and contributions 
to the BOARD CAFE.  
If you would like your own free fax subscription to the BOARD 
CAFE, contact the Board Cafe at any of the numbers listed above. 
If you would like to have the BOARD CAFE delivered to you free 
via electronic mail, send an blank e-mail message to 
boardcafe-on@lists.compasspoint.org.  To unsubscribe to the 
BOARD CAFE send a blank email to 
boardcafe-off@lists.compasspoint.org, or fax your 
request to 415.541.7708. The Board Cafe's e-mail/fax list is not 
rented, exchanged, or given to any other entity. 
(c) 2001 CompassPoint Nonprofit Services/BoardSource (formerly 
National Center for Nonprofit Boards)
 
 
**This list is powered by npo-mail.org, offering high-quality mail and list service to the nonprofit community.