Board members are the supervisor of the CEO/executive director – that same executive director may have to tell the board member that his daughter’s job performance is unsatisfactory. Compensation paid to family members of board members must be disclosed on a nonprofit’s annual report to the IRS (Form 990) and should also be disclosed to the entire board. These realities cause many nonprofits to avoid hiring a family member of a board member. Each organization should consider how they would handle this situation and decide whether the risks of hiring a family member of a board member are risks the organization is willing to accept.
