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When and How to Resign from a Board

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by Tamara Paton in Interpersonal
resign from a board

I write about how to build a thriving career on boards. My conversations with clients focus on networking ideas and boardroom skill development. If I’m not helping people with their board careers, I’m investing in my own.

It may surprise you that I’ve been preoccupied lately with the question of how to resign from a board. You have a right to roll your eyes if you are still seeking an elusive board seat. If you’ll stick with me, however, I think you’ll agree that leaving an organization deserves the same thoughtful intention that we demonstrate when joining in the first place.

Some of my recent posts have revealed challenges that I face as a director (see here and here). These speed bumps come with the territory and I have worked hard to address the issues. Unfortunately, in the case of one board, the time has come for me to be realistic about my potential impact.

Coincidentally, I recently advised a client facing a similar decision point. She felt increasing concern for her board’s command of risk oversight. As each board meeting arose on her calendar, a knot of worry took hold and she waited for the proverbial shoe to drop. After reflecting on her interest in navigating a high-profile PR scandal, she resigned.

Every director’s situation is unique, but the questions that shaped my client’s approach can help us all. By reflecting on the rationale to stay, the reasons to leave, and the manner in which to proceed along either path, you can evaluate your future and then proceed professionally.

If you find yourself wondering “Should I stay or should I go?”, consider these questions:

  1. Do you lack confidence in the organization’s direction and strategy?
  2. Do you feel uncomfortable with the organization’s commitment to good corporate governance?
  3. Do you lack a sense of shared integrity and values among board members?
  4. Has there been an unresolvable breakdown in confidence and trust among board members? Would your resignation ease the tension?
  5. Do the perceived risks of serving on the board outweigh the rewards and potential to make an impact?

If you answered “yes” to one or more of these questions, you probably know what you need to do. How to proceed is another matter. Naturally, I have a few thoughts on that.

Before you resign from a board, assess your options

Begin by reviewing what, if anything, your organization’s articles say about how a resignation must take place. Some boards must approve a resignation before it becomes effective. It is helpful to know how much freedom you have before proceeding.

Also consider whether leaving a board actually brings you greater personal risk. According to the Association of Chartered Certified Accountants, courts may look critically at a director who throws up his hands:

“A court might take the view that the director should have stayed on the board to try to sort out the mess for which he or she was partly responsible. Where the company faces probable insolvency, a director is required to take every step to minimise losses to creditors, otherwise he or she will face personal liability for the company’s ongoing debts.”

A director who flees the scene may well be worse off than one who stays and tries to resolve dysfunction. When timing your resignation, consider whether you have done your best to make things right and whether you have documented evidence to that effect.

Leave with the same character you demonstrated on your way in

This may be obvious to you, but resign in person, if possible. Otherwise, arrange time to speak with your chair via telephone. It is tempting to send an email, but inconsistent with the classy way I imagine that you’ve conducted yourself up to this point. Follow the conversation with a written resignation letter that indicates your last official day as a board member and requests a copy of the minutes of your final board meeting.

When communicating your decision, express your desire to do the best thing for the organization. In its report, the ACCA suggests that it is damaging “if the board is seriously and continuously divided on fundamental issues – such as the strategy of the company.” In light of whatever challenges prompted you to resign, highlight the freedom that the board will now have to pursue its desired path.

Assuming that your term on the board will continue for a short time, make the most of your final meetings. On the heels of my recent resignation, I am actively resisting the temptation to fade away. I have formally communicated my reasons for leaving the board, but that doesn’t relieve me of responsibilities over my remaining time. Staying engaged is the best way to discharge one’s fiduciary duties and maintain positive relationships with colleagues.

If you are resigning due to dissent surrounding strategy or values, go quietly and speak graciously of your colleagues now and in the future. Assuming you are not resigning due to a suspected breach of law, regulation or accounting standards, then it make an extra effort to act with class.

It isn’t easy to end a relationship, whether with an individual or an organization. I suppose that is why there are so many pop songs written on the subject (and I have hummed the chorus of many while writing this post). However, if we approach each situation with a desire to move forward positively, we can make the most of a challenging situation.

Question: Have you left a board earlier than you once planned? What factors influenced the timing and manner in which you resigned? I would love to hear your thoughts via Twitter.

When and How to Resign from a Board

by Tamara time to read: 4 min
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