Closed Sessions of the Board

You Asked: Recently I have begun to feel uncomfortable with the closed sessions our Board of Directors has been having. Our Board Chair has now suggested that we have a closed session at every meeting without the CEO or any staff present. The Board agreed to go along with the Chair, but I don’t think I’m the only one that doesn’t really like it. What do you think of closed sessions? Are they right?

Answer: Closed sessions are occasionally necessary, but they should be held rarely and only for reasons that the entire Board agrees are necessary. The idea that your Board Chair suggests, that a portion of every board meeting should be closed to the CEO, sounds suspicious. Is there tension between the Chair and the CEO? If there is, it may be that the Board Chair is using his power to gain access to the Board without the CEO having equal access to the discussion. That’s a perfect recipe for injustice and a flawed decision.

In my view closed sessions should be held rarely and only for several specific purposes that are known and agreed by everyone directly affected. For example, a discussion within the board regarding which candidate among those being considered for the position of CEO or another position that reports directly to the board might be in a closed session. Even in this case I would include those members of the Search Committee who are not on the board.

Another example where the CEO may be excused from the meeting temporarily is when the CEO’s salary is being considered. Even here, the Board should be interested in hearing a perspective from the CEO before being excused.

Another possible reason to excusing a person normally in attendance is when there is a potential or actual conflict of interest. In this case it is in everyone’s best interest to exclude the person in potential or actual conflict from the vote and possible also from the discussion.

Very occasionally, the CEO may be excused when a disciplinary action involving the CEO is being decided. This, however, is one of the most likely examples where the board is at risk of abusing its power. More on that later.

Perhaps we should first step back a bit and ask a more fundamental question. Who should attend Board meetings, not who should be excluded from them?

Normally, the board process cannot have quality without the executive staff that receives its authority directly from the board in attendance. Usually this means only the CEO, but in some non-profit organizations there are two chief executives, as in the case of a headmaster of a school and the administrator. A recording secretary, if that person is not a board member, should also attend all meetings of the board. A board meeting is normally closed to anyone else, because anyone else would normally require an invitation to attend.

A “closed session” or in camera session means a session when one or more of those normally in attendance are excused. This could also be the chair or one or more of the directors, depending on what the agenda item is.

The greatest danger of closed sessions is that they may be designed to put at a disadvantage the person or persons who are being excluded. For example, I can recall a case where a CEO was excused while some accusations were being brought against this CEO, but there was never any opportunity given the CEO to hear the accusations or to make a defense. The board made a decision in the same closed session and then called the CEO in for the decision. It should come as no surprise that the decision was not in the CEO’s favor.

This board evidently forgot the words that Festus spoke to Herod regarding the accusations made against Paul. “I told them that it is not the Roman custom to hand over any man before he has faced his accusers and has had an opportunity to defend himself against their charges.” (Acts 25:16 NIV)

Incidentally, this same principle is entrenched in the American Bill of Rights and the Canadian Charter of Rights and Freedoms. It is also one of the few sections of the Magna Carta of 1215 that is still part of British common law. Unfortunately, it is not as commonly followed in some Christian groups.

In the final analysis, any board might ask this basic question in order to determine whether a CEO or other persons who are normally a part of the board process should be excluded. Is our decision to excuse this person in the best interest of a quality decision and fair to the person(s) being excused?

Les Stahlke, President/CEO
GovernanceMatters.com Inc.