Association Boards: Integrity with Conflicts of Interest
Ursula is a director of an industry association. Although they use terms such as ‘Councillor’ and ‘council’ it is constituted as a board and the members have the same duties and responsibilities as directors under the Corporations Act. All directors are nominated by companies within the industry and serving on ‘The Council’ is seen as an indication that a person has been identified as a future leader within their organization and within the industry.
Councilors use the Council to promote their own profiles and enhance their networks.
Ursula is concerned with another aspect of their behavior; using information that comes to the Council to benefit their own organizations. Information about proposed regulatory changes has leaked allowing first movers to gain an advantage; Ursula suspects her colleagues are involved.
Now the Council is deciding on a package of grant funding that will benefit the smaller participants in the industry as well as attract start-ups. Although this is clearly in the interests of the industry the councilors all come from larger, well-established, companies and oppose the program as it will create competition for them. At the last meeting, the Chairman remarked “I don’t see why we should be helping upstarts to eat our lunch.” Another board member responded, “My boss will certainly not thank me if this gets approved.”
Staff at the government department are mystified as to why a good grant package is taking so long to get industry sponsorship and is continually bogged down in discussions. They have asked Ursula for her opinion on the best way to expedite it.
How should Ursula respond to this request?
Many readers of this blog will be familiar with my newsletter The Director’s Dilemma. This newsletter features a real-life case study with expert responses containing advice for the protagonist. Many readers of this blog are practicing experts and have valuable advice to offer so, again, we are posting an unpublished case study and inviting YOU to respond.
If you would like to publish your advice on this topic in a global company directors’ newsletter please respond to the dilemma above with approximately 250 words of advice for Peter. Back issues of the newsletter are available at http://www.mclellan.com.au/newsletter.html where you can check out the format and quality.
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What would you advise?
Julie Garland-McLellan has been internationally acclaimed as a leading expert on board governance. See her website atwww.mclellan.com.auor visit her author page at http://www.amazon.com/Julie-Garland-McLellan/e/B003A3KPUO