Q&A #136 – Is good cause required to remove a nonprofit Board member?
Question: I serve as the chairperson for a nonprofit organization that has had issues with a particular Board member. This Board member has missed numerous Board meetings and has been difficult to work with. Do we need to show good cause to remove this person from the Board, and is failure to attend Board meetings a sufficient reason for removal?
Answer: A nonprofit organization’s Bylaws generally determine whether “cause” is required to remove a Board member and, if so, what type of conduct or inaction constitutes cause for removal. The applicable state nonprofit corporation statute may have some rules and guidelines related to the removal of directors, but these laws usually defer to the organization’s Articles of Incorporation and Bylaws, so checking your own governing documents is always the first step.
As a default rule, it is common for state nonprofit corporation statutes to provide that Board members may be removed with or without cause unless the organization’s Articles of Incorporation and/or Bylaws specify that Board members may only be removed for cause. Further, it is common for state nonprofit corporation statutes to state that an organization’s Articles of Incorporation and/or Bylaws may specify what constitutes cause for removal.
Under this framework, if an organization’s governing documents are silent on the issue of whether cause is required to remove a Board member, then it can usually be presumed that a Board member can be removed for any reason. This would be accomplished just like any other Board action by holding a vote at a meeting attended by a quorum of directors.
However, note that there may be special rules under state law that apply in the case of a “membership” organizations, as state law often reserves the right to remove a Board member of a membership organization to the organization’s voting membership except under certain special circumstances. And the organization’s Bylaws may have language requiring a higher voting threshold for removal, such as an absolute majority or supermajority.
In any case, habitually missing meetings is traditionally considered to be a well-justified reason for removal of a Board member. In fact, some nonprofits have language in their Bylaws explicitly stating that missing a certain number of Board meetings in a row (e.g., three consecutive meetings) is per se cause for removal or, in some cases, will be deemed to constitute the absentee Board member’s resignation.
Planning Tip – As with any important Board decision, the removal of a Board member should be preceded by documented efforts to address and the resolve the situation. While the Board may or may not be legally required to show “cause” for removal, depending on the organization’s Bylaws and applicable state nonprofit corporation law, clear communication about the problems that need to be addressed and attempts to rectify these problems usually helps to reduce the negative emotions and internal disputes that can be generated by the removal of a Board member.
Be aware that voting on removal of a Board member may require careful navigation of the organization’s meeting notice requirements, as a currently sitting Board member will typically be entitled to receive notice of all meetings. This notice may need to specifically state that the reason for the meeting is to vote on the removal of the Board member, depending on applicable state law and/or the organization’s Bylaws.
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