Nonprofit Newswire | The Founder and the Board: A Cautionary Tale

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September 1, 2010; Source: Star Tribune | In Minnesota, the founder of an organization that serves ex-cons with substance abuse problems was escorted from the agency by the police at the board’s direction. Paul Kustermann became engaged in a struggle with his board of directors after a three-year period of intense growth.

CTSI grew from a $112,000 a year program in 2007 to a budget of 655,000 in 2010. This article from the Star Tribune implies that a dispute emerged between the board and founder, Paul Kustermann. From the article: “Kustermann said he grew frustrated because he could not get the board to pass an operating budget or a strategic plan, he couldn’t reach the board chairman and rarely saw members at organizational events. After a period of feeling estranged from the board, he invited a past board member, Dennis Parmenter, to establish a second board of directors.”

The shadow board took it upon themselves to “fire” the first board which apparently did not agree with the decision or the shadow board’s right to make decisions at all; and somewhere in all of this, Kustermann was terminated and on the morning he was evicted from the premises both board presidents were present each claiming to be in charge.

What a mess. While everyone involved is saying that what is important in the situation is the well being of the clients, it will hardly inspire confidence to have this played out so publicly. This type of organization, so badly needed, is traditionally difficult to fund and site. Anyway, it’s a good cautionary tale for boards and execs not to let things linger and become adversarial.—Ruth McCambridge