Procedure for dealing with accusations against board

[rrma]

I am looking for help to deal with a problem board member making unfounded accusations.  We are a 501c7 Social Club with 700 members.

I am the board president and would like general or specific guidance the I could either do myself as president, or give to another well intentioned board member to make as motions of their own.

The ProblemDirector (newly on the board) is accusing the board generally and Treasurer specifically of not following correct accounting procedures and violations of private benefit and inurement regulations from the IRS.

None of it is true.  We have read IRS regulations aloud during a meeting and tried to demonstrate that his understanding is incorrect, but he comes back with another misreading the following month.  He is also not shy about telling association members that he is trying to save the club from being shut down by the IRS, who then show up at the monthly board meeting up in arms.

The Treasurer has come to me upset because the rumors have moved out of the association and into the local business community that he is not doing proper accounting.  Concern about defamation.

Half the board knows the ProblemDirector has past personal animus toward the Treasurer and know this is deliberate, but aren't sure what to do about it.

The other half of the board is scared that they will be "held personally accountable by the IRS", and are ready to walk away, because this level of drama is not worth it for volunteer work.

What can I do to help move this toward a conclusion?

[Rob Elsman]

Those who might have compensable damage from the slanderous accusations might want to retain an attorney and pursue the matter in a civil court.

Edited March 25, 2024 at 04:59 PM by Rob Elsman

[rrma]

They are aware, but right now the ProblemDirector can pretend good faith by "bringing attention to concerns" to the board.

That the concerns are vague, accusatory, and change month-to-month I am not some what to do.

[Josh Martin]

On 3/25/2024 at 11:01 AM, rrma said:

What can I do to help move this toward a conclusion?

I don't know. What "conclusion" are you looking for?

If the goal is, for example, disciplinary procedures against the board member in question, check your bylaws to see what they say on this subject, or if they are silent on that subject, see Section 62 of RONR.

Edited March 25, 2024 at 05:24 PM by Josh Martin

[rrma]

Discipline would be premature, but RONR would apply.

There are still several members that ask me, "Should I be concerned about [random website] ProblemDirector showed me?  He says the IRS can come after me personally."

 

 

 

[Josh Martin]

On 3/25/2024 at 12:32 PM, rrma said:

Discipline would be premature, but RONR would apply.

There are still several members that ask me, "Should I be concerned about [random website] ProblemDirector showed me?  He says the IRS can come after me personally."

Okay. For my next guess, I would say that to the extent that the member makes unsubstantiated allegations of wrongdoing against board members, the chair may rule such comments out of order.

If the member refuses to listen and keeps speaking anyway, for disciplinary action against members for offenses occurring during a meeting, see RONR (12th ed.) 61:6-18. In summary, such procedures provide that, after repeated warnings from the chair, the assembly may, by majority vote, order the offending member to be removed from the meeting room (or even harsher penalties, if desired).

I'm not entirely certain I agree with your position that "Discipline would be premature," but I suppose that's ultimately up to the organization, not me. RONR says the following:

"If there is an article on discipline in the bylaws (56:57), it may specify a number of offenses outside meetings for which these penalties can be imposed on a member of the organization. Frequently, such an article provides for their imposition on any member found guilty of conduct described, for example, as “tending to injure the good name of the organization, disturb its well-being, or hamper it in its work.” In any society, behavior of this nature is a serious offense properly subject to disciplinary action, whether the bylaws make mention of it or not." RONR (12th ed.) 61:3

We are told that the member's repeated (and apparently unfounded) allegations that the society is violating various IRS regulations has led to "half of the board... scared that they will be "held personally accountable by the IRS", and are ready to walk away, because this level of drama is not worth it for volunteer work".

That certainly seems like conduct "tending to injure the good name of the organization, disturb its well-being, or hamper it in its work" to me.

Edited March 25, 2024 at 05:45 PM by Josh Martin

[rrma]

Ahh. I had gone toward "discipline" as removal from office, and didn't consider intermediate levels that would only need majority vote. 

Is there a way for a member to motion that ProblemDirector state his complaints explicitly? 

Once they've been addressed, I could read the rules you mentioned above, which would put the offender on notice?

Thank you for this help.  Obviously I'm new at this role, but so also is the board (in having a presiding officer that tries to follow the rules).

 

[Josh Martin]

On 3/25/2024 at 12:59 PM, rrma said:

Is there a way for a member to motion that ProblemDirector state his complaints explicitly? 

I suppose a member could do so, but I'm not sure what the purpose of this would be. Nor is it clear to me such a motion would be enforceable.

On 3/25/2024 at 12:59 PM, rrma said:

Once they've been addressed, I could read the rules you mentioned above, which would put the offender on notice?

Sure.

Edited March 25, 2024 at 07:47 PM by Josh Martin

[Atul Kapur]

On 3/25/2024 at 1:59 PM, rrma said:

Ahh. I had gone toward "discipline" as removal from office, and didn't consider intermediate levels that would only need majority vote.

Removal from office only requires a majority vote under two sets of circumstances

(a) if the bylaws specify the term of office as "___ years or until their successors are elected" and previous notice was given; or

(b) if the bylaws specify the term of office as "___ years and until their successors are elected" and the person was found guilty after a trial, then the meeting may vote to remove the person from office by a majority vote.

[Gary Novosielski]

On 3/25/2024 at 12:01 PM, rrma said:

I am looking for help to deal with a problem board member making unfounded accusations.  We are a 501c7 Social Club with 700 members.

I am the board president and would like general or specific guidance the I could either do myself as president, or give to another well intentioned board member to make as motions of their own.

The ProblemDirector (newly on the board) is accusing the board generally and Treasurer specifically of not following correct accounting procedures and violations of private benefit and inurement regulations from the IRS.

None of it is true.  We have read IRS regulations aloud during a meeting and tried to demonstrate that his understanding is incorrect, but he comes back with another misreading the following month.  He is also not shy about telling association members that he is trying to save the club from being shut down by the IRS, who then show up at the monthly board meeting up in arms.

The Treasurer has come to me upset because the rumors have moved out of the association and into the local business community that he is not doing proper accounting.  Concern about defamation.

Half the board knows the ProblemDirector has past personal animus toward the Treasurer and know this is deliberate, but aren't sure what to do about it.

The other half of the board is scared that they will be "held personally accountable by the IRS", and are ready to walk away, because this level of drama is not worth it for volunteer work.

What can I do to help move this toward a conclusion?

Well, I presume he's not making these accusations during a meeting, because that would be a severe violation of decorum, and the chair should nip that in the bud.  And I think that's you.  Unless he's moving to establish a disciplinary committee to formally investigate the Treasurer, his remarks are out of order.  And even if he is, that motion cannot make accusations--in fact it's probably not in order during a board meeting at all, since it's usually a power of the membership.  See Chapter XX of RONR, and your bylaws.

If he's slandering board members, that's a civil offense, and he might need a lawyer letter, as a first step, to identify to him the error of his ways.

Edited March 26, 2024 at 12:55 AM by Gary Novosielski