A nonprofit organization has given its CEO an employment contract that makes the CEO a member of the board, although there is nothing in the bylaws about the CEO serving on the board. The board is now asking whether they should change the bylaws to provide that the CEO serves ex officio. Do you think they should change the bylaws? Does it make a difference if the exec has a vote or not?
If you assume that an ex officio director has the right to vote (which isn’t always clear and should be spelled out in any bylaws having ex officio directors), I don’t think it makes a great deal of difference whether you amend the bylaws at the moment or not. I generally don’t think it’s necessary to have the CEO on the board so changing the bylaws to have the CEO as an ex officio member would make a decision for future boards and CEOs unless the bylaws were to be changed back to eliminate the automatic appointment. Changing the rules later could be off-putting to the new CEO. If you want the flexibility, you would not put it in the bylaws.
But if you don’t put the ex officio position in the bylaws and you fire a CEO who has been separately elected to the board, that person remains on the board until you go through the process for expulsion, with its required notice period and opportunity to be heard. In an orderly transition, the CEO would probably resign unless the board wanted to keep the CEO on the board for some reason, but in a termination case it could get ugly.
If the CEO is deemed to be a member of the board without a vote, does the CEO count towards the quorum? I would consider a “director” without a vote merely an invited guest who wouldn’t be counted towards the quorum. But that could be a great piece of litigation if it isn’t stated anywhere how to measure the quorum. It also isn’t entirely clear what other rights (or obligations) of a director this person might have or not have. Of the three situations, this seems the least attractive because its uncertainty could easily lead to litigation if a dispute arose when the CEO’s presence or absence determined the outcome of a controversial vote.