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Tips and Answers
to Your Questions
Implementing a Partnership
How do you interlock boards in a merger?
The quickest and easiest way to "merge" two nonprofits is
to create interlocking boards. Two organizations may desire to merge,
but for technical reasons need to keep the two corporations alive.
Alternatively, two organizations may need or desire to merge immediately,
and are not able to wait for the legal paperwork of a dissolution or
merger to be complete. In such a case interlocking boards can be used
as an intermediate step, assuring unified control of the organizations
in the short term, until the merger is legally accomplished and the
organizations become one on the corporate level.
To create interlocking boards, the two organizations must reconfigure
their boards so that the same group of individuals makes up both boards.
There is no legal paperwork involved in doing this, though one or both
of the boards might need to change its bylaws to allow a larger size
board.
The first step in the process is to make a list of all current members
of each board. Next, determine how many slots the newly constituted
boards will have. In order to avoid creating an unwieldy board you
may need to reduce the total number of board slots. For example, if
each board currently has 14 members, you may want to create interlocking
boards with a total of 18 members, 9 from each group. If the bylaws
of either organization limit the board to a size smaller than you would
like for the interlocked boards, the current board of that organization
should vote to change its bylaws to allow a larger size.
Both organizations must then work together to decide which of the
current board members will sit on the interlocking boards. It is wise
to include the same (or a very similar) number from each organization,
and to pay the usual attention to achieving a diverse mix of people,
skills, and viewpoints in the group. Remember, these individuals will
be serving on the boards of both organizations. There will still be
two boards (at least until a merger legally takes affect), but they
will be identical in membership.
Once both organizations agree on the size and membership of the interlocking
boards, each current board must, at its next meeting, vote to change
its membership and elect the newly proposed group to the board.
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