Board Authority in Non-Profit Mergers: A Case Study

As employees of a non-profit organization (Ace Loan) whose employment is based upon selection by a board of directors, it is imperative that those employees follow the direction of the board regardless of their position. A merger with a slightly larger organization, Widget Loan Organization, was in the works when their senior officers approached Paul President. Although Paul President had been keeping the board informed of the activity surrounding the merger, the board changed their mind instructing Paul President to cease with the merger and forward any contact with Widget to the Board. Vicki Vice-President was also aware of the board decision and therefore should have contacted the board when Paul President made arrangements with senior

This created an unclear ethical dilemma for Vicki Vice-President. Even though Vicki Vice-President was told that the board no longer approved of the merger with Widget there were ambiguous features that clouded the choices she made. This dilemma caused Vicki Vice-President considerable stress, because a single choice would have to be made that may not feel well served as a result. Before Vicki Vice-President made her decision on whether or not she would ignore the board’s decision, she should have allocated herself sufficient time to think through the results of her actions. Vicki Vice-President also should have identified that the entity she owed primary allegiance too was the board, not Paul President. The board was the entity that appointed Vicki Vice-President; therefore she should have involved the board in her decision to support Paul President. If Vicki Vice-President would have thought the actions through, she possibly could have avoided any ethical dilemmas in this situation (Koocher, Spiegel,

These same standards must apply to all levels of the company for the company to thrive. Vicki Vice-President failed in all three areas, ethical reasoning, the application of morals and ethics to a situation, duty-based ethics, the idea that every person has certain duties to others, and outcome-based ethics, which focuses on the action itself and the impact the decision has to maximize benefits and minimize harm (Cross, Miller, 2015). First she was appointed into a key position within Ace, which came with certain obligations that needed upheld. The Board, which appointed her, specifically stated that all negotiations with Widget were to cease unless the Board approved such a venture. Second, Paul President invited key officials from Widget for a full day visit at Ace, which allowed them access to loan files and Ace procedures. Third, in an effort to avoid a dilemma, Vicki Vice President eluded Paul President’s invitation to be present during the day of the visit with senior officials at Widget by stating that her conscious would not allow her to participate, and therefore would work from home. The decision of the board to cease and desist their negotiations with Widget could come from corporate social responsibility in which Ace considered its decision on the impact it would have had on its customers, creditors, and the community in which it operates. Clearly speculation, but at least it has