The Worst "Isms" - Nepotism and Cronyism

By: Caroline Hoy, Boardable Content Manager

Associations are vulnerable to many of the same thorny issues that for-profit businesses face. In an environment that values relationships and status to some degree, it is no wonder that there’s a risk of nepotism and cronyism in associations and nonprofits. Let’s look at why this is a dangerous problem, how it happens, and what to do about it.

Nepotism and Cronyism Take Many Forms

Nepotism and cronyism are the practice of hiring or conferring advantages at work on family members or friends, especially by people in power. It doesn’t sound so iffy at first, right? Maybe the program director’s old college buddy loses his job suddenly and she lobbies to land him a contract at the organization. If he is qualified and the work was in the budget anyway, it’s a win-win, isn’t it?

Recently, an executive director told us about a challenging situation at her nonprofit. One of their biggest donors asked if there was an opportunity for her daughter to intern at the organization. She’s a good kid, so what’s the big deal? Unfortunately, even these everyday examples of cronyism and nepotism can have lasting harmful effects.

Nepotism Is Fertile Ground for Problems

There are a number of reasons that nepotism is so dangerous not only for businesses, but also for associations and nonprofits. If you find yourself tempted to allow a little “harmless” nepotism at your organization, consider the following possibilities:

  • There is probably better-qualified talent, if you look objectively.

  • How will you offer constructive feedback to someone who is protected by a more powerful connection? What if you wanted to terminate them?

  • Morale at your organization will suffer if coworkers see their hard work looked over in favor of someone more connected.

  • Can your staff make objective decisions about operations with conflicting interests and alliances in play?

  • A collection of people with similar backgrounds and perspectives can’t problem solve as well as a more diverse collection of people.

How to Guard Against Nepotism

Like most insidious or ethical challenges at an organization, the best offense is a good defense. Setting a firm anti-nepotism / cronysim policy in your bylaws and onboarding agreements lays out expectations. You might want to offer examples like the ones above and even do periodic board education on the topic. Be sure that your governance committee is well-versed on the topic and has a clear process for addressing questions of conflict of interest and nepotism.

Handle with Care

It’s easy to recognize blatant harmful nepotism or cronyism, but there may be more subtle situations that arise. For example, you might be hiring for a position, and a relative of a powerful figure at the organization truly is the best candidate. Similarly, the same could occur with contract bidding or selecting a venue for an event. In these cases, look to your bylaws and governance committee for guidance. At a minimum, any connected parties should recuse themselves from all relevant decision-making discussions.

Another crucial element is to have a formal process for evaluating vendors, employees, and other parties. If you have that set in advance, there is little subjectivity needed in performing routine assessments. In general, the more you can define expectations, protocols, and definitions ahead of time, the less room there is for confusion or manipulation.

Nepotism and Cronyinsm Don’t Have to Be a Given

Finally, remember that your high standards don’t need to be compromised, just because something is common or accepted. Stick to your mission, vision, and bylaws, and you will safeguard your organization from this tricky problem. Keep up the great work!

About Boardable: 

Boardable is an online board management portal that centralizes communication, document storage, meeting planning, and everything else that goes into running a board of directors. Founded in 2017 by nonprofit leaders and founders, Boardable has a mission to improve board engagement for nonprofits. Boardable is based in Indianapolis, Indiana.

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