Corporate boards, whether in the for-profit or nonprofit sector, are accountable to the communities for which and in which they operate. Boards serve numerous functions, including setting the overall mission of the organization; hiring, compensating and evaluating the performance of CEOs; ensuring adequate financial resources and oversight; recruiting new board members to replace retiring board members; and providing wise counsel on legal, ethical and social responsibilities.
For-profit corporate boards represent the interests of the owners of the corporation. This means shareholders. In the nonprofit world, however, who “owns” the organization? It is not the CEO (although sometimes CEOs act as if they are the owners), nor is it the board.
In the case of Jewish nonprofits, I suggest that, from an ethical perspective, the best answer to the question of who owns the organization is the Jewish community, as a whole, or at least that portion of the community that the organization aspires to serve.
Read the Forward’s special op-ed section on How to Handle Our 1%, including Leonard Saxe on Creating a Tax for Jewish Education, David A. Teutsch on Training More Leaders, and Shifra Bronznick on Hiring and Paying Fairly.
If this insight is correct, several important implications follow. A board should reflect the diversity of the community that it represents. Board members should include men and women, business leaders, accomplished professionals, educators, clergy, representatives of labor, along with philanthropists. Further, it is the board itself, and not the CEO or professional staff, that is ultimately responsible for selecting new board members. Allowing the CEO and his or her staff to select new board members is like letting the home baseball team select its own umpires.
Board members should be selected not only based on their ability to provide financial support to the organization but also on their ability to articulate and demonstrate the highest and best values of the Jewish community.
Nonprofit boards have a responsibility to publicly report sufficient information so that the community can evaluate their finances and other measures of performance. The disclosure of this data should be part of an ongoing dialogue between the organization and the broader Jewish community. Nothing short of the legitimacy of the organization is at stake here.
Jewish boards are like the mashgiach at a wedding, who ensures that the food is kosher. The mashgiach does not cook the food but is there to make sure that the caterer is following the traditional rules of kashrut. Jewish boards should be not so much running Jewish organizations as overseeing them.
We often make the mistake of thinking that Jewish ethics can be found only in books and codes. This is wrong. Jewish ethics, if they are to be found anywhere, are to be found in our daily activities. Most profoundly, Jewish values are those values-in-use that drive the behavior of our most important Jewish institutions — schools, philanthropic organizations, nursing homes, synagogues, universities, family service providers and newspapers.
At their best, Jewish boards represent the Jewish community as a whole. They are not the guardians of Jewish values, but they are the most watched contemporary practitioners of Jewish ethics.
To fulfill their responsibilities to the Jewish community, Jewish boards must speak the modern language of efficiency. There is nothing sacred in wasting resources. More important, though, Jewish boards must carve out a space where ethical dialogues can flourish and make a real impact on organizational behavior.
Moses Pava is the Alvin Einbender Professor of Business Ethics at the Syms School of Business, Yeshiva University. His most recent book is Jewish Ethics in a Post-Madoff World (Palgrave Macmillan, 2011).