Using Designated Contrarians to Improve Nonprofit Board Oversight

A legal expert is advocating for the practice of assigning a designated contrarian and rotating this role regularly to assist nonprofit boards in resisting the dangerous pull toward passivity and deference. The trial involving the National Rifle Association and its leaders is set to commence on Jan. 8, 2024, more than three years after being sued by New York authorities. The lawsuit filed by New York Attorney General Letitia James alleges that NRA Executive Vice President Wayne LaPierre used the organization for personal financial benefits and diverted over US$63 million from legitimate uses. Despite having a 76-member board of directors and a designated audit committee, the NRA failed to adequately monitor the organization's financial health, contributing to its current legal troubles. As a nonprofit law expert, together with University of Minnesota law professor Claire Hill, we propose a system where nonprofit boards require members to serve as designated contrarians. This practice entails board members taking turns to ask critical questions and push for deeper debates about organizational decisions, aiming to prevent debacles in the future. Nonprofit boards have a legal obligation to provide oversight over nonprofits and their leaders, to ensure proper governance and vigilance for any major problems. The NRA's board had a responsibility to detect and intervene in the alleged wrongdoing, redirecting organizational resources and preventing wasteful spending. It is common for nonprofit directors to volunteer their time and donate money to their organizations, assuming that their colleagues on the board share good intentions and often showing deference to full-time executives and major donors. This passivity can lead to boards failing to challenge mismanagement or unwise decisions. We propose that trustees take turns being designated contrarians, obligated to challenge proposed board actions, spark critical discussions, and encourage reflective decision-making. While not yet widely practiced, a few nonprofit boards may have embraced this concept, with the potential to improve governance and decision-making. However, embracing this practice alone may not be sufficient to entirely transform a board's governance, and it comes with challenges such as the authenticity of dissent and the transformation of passive individuals into critical thinkers. It's a process that requires patience and perseverance to make nonprofits more accountable and effective.