Board Involvement with HR and Personnel Policies

Response #1: This strikes me is crossing the line from oversight to micromanagement. The details of these policies are management's prerogative. My risk management committee wanted to see an index of all our policies and procedures, which I was comfortable with. It seems like a reasonable way for them to know that the major issues were being covered. When one member of the committee suggested that they review individual policies before implementation, I pushed back. It is no way to run an organization to wait for volunteer board members to be involved in that level of detail. The chair of the committee backed me fully.¹

Response #2: Certain policies may be board requirements, such as an anti-corruption policy, in which case I would expect the policies to have been approved as a matter of form within a resolution or board consent. Management would then implement as necessary. Otherwise, I agree that the board should be involved in general guidance but not specific review.²

Response #3: When we did a major update to our employee handbook, we gave our Board a presentation on the changes, but they did not approve it. With one exception, we have not had them review individual policies. The exception was when we set up a third party complaint hotline at the request of the Board, They were not involved in the selection of the hotline company, but we did review the policy for establishing contact persons for certain types of complaints against executive management, since some of them would be reported by the hotline to either our Board chair or Treasurer.

As for employee benefits, we also changed our 401K provider a couple of years ago; we did not involve the Board in the decision, but did brief them on the selection process and the ultimate decision. Otherwise, changes to benefits are reviewed as part of annual budget approvals.³

Response #4: I'm the General Counsel for a midsize nonprofit (250 employees) and our board has very limited involvement in HR and personnel policies, except where the policies would have a financial impact on the company. For example, when we increased the number of vacation days given at certain employee anniversaries, our board approved that in a resolution.

Employee retirement plans are a different story. The oversight requirements for 403(b) plans are very stringent and, although our Board has delegated oversight responsibilities to our Oversight Committee (a committee made up of our executives and HR manager), we update the Board members every meeting on all the steps we have taken to oversee the plan.⁴

Response #5: Our board approves changes to the policies regarding conflicts of interest and code of ethics (which contains our whistleblower provisions). We report out on any new policies that are required in order to comply with state/federal regulations.

The board does not approve the health plans per se, but its costs are discussed with our finance committee as part of our budget process. The board approves any amendments to our 403(b) plan.⁵

Response #6: This post is not related to my immediate employer, but based on personal experience, which may benefit this group. A top executive, employed by a board I sit on, left their position after many years. The new executive began to provide information which the board had not been given, and as more information came to light over a number of months it became evident to all members of the board, including the board chair, the past boards had lacked very important information about many of the HR and executive level administrative practices which led to significant problems. The problems developed under the expressed concern of avoiding having a board that "micromanaged". The board is now in the process of reviewing and approving the entire policy and procedure manual. As a needed balance to provide the most efficient environment for management to continue to operate, management is responsible for drafting the specific operational manuals for day to day procedures of each department, with each of those manuals being included in the larger policy and procedure manual, which all board members are given. All amended operational manuals are to be provided to the board upon their implementation by management. These measures have proven to be necessary to prevent the serious issues of the board being selectively informed, which ultimately meant the board was kept in the dark on matters which controlled significant issues of the corporations true condition, thus the board was never able to govern properly with full knowledge. Based on these experiences, my own perspective "needle" has shifted a bit more toward "full disclosure and involved oversight" by the board and a bit further from involvement in all significant issues that create any form of risk viewed as micromanagement. Incidentally, my additional thoughts are that each of these posts have been very helpful for an excellent range of various experiences and each has contributed much to my own knowledge base.⁶