If you’ve served on a For-Purpose board, you’ve likely seen it — a fellow director advocating for the appointment of a friend or relative. What I call the insiders.
On the surface, the rationale can seem reasonable. It’s someone they know and trust. Someone dependable, like-minded and ready to help. To them, it feels like a safe, practical solution. But this is often where the risks begin.
However persuasive the case may be, appointing an insider is rarely in the organisation’s best interests. Even if they are qualified, when relationships — not capability — drive appointments, the integrity of the process is compromised. And so too is the confidence others place in the board’s decisions.
That’s why strong boards prioritise merit-based appointments. Done well, it attracts the most capable individuals, enhances diversity of thought and reinforces transparency — strengthening both performance and public trust.
Here’s why appointing an insider can be problematic:
Personal relationships compromise objectivity.
It becomes harder to separate governance from loyalty, blurring lines of accountability and increasing the risk of conflict.
Merit takes a back seat.
Decisions based on familiarity limit diversity, reduce board effectiveness and erode rigorous thinking.
It fosters groupthink.
Boards shaped by personal ties are less likely to challenge assumptions or welcome dissent — weakening robust discussion and sound judgement.
Credibility suffers.
Funders, regulators, staff and communities quickly detect favouritism. Once trust is lost, reputational damage is hard to contain and harder to repair.
And ultimately, governance is weakened. Transparency, fairness and accountability are not optional — they are the foundations of effective board performance. When appointments are personal, those foundations crack.
In my work supporting For-Purpose organisations with board and executive appointments, I see this dynamic all too often. While often well-intentioned, the outcome is the same: diminished leadership and weaker oversight.
Appointments should reflect what the organisation needs — not who a board member knows. Capability, commitment and strategic fit must take precedence over comfort or familiarity.
Boards must ask: Are we choosing the person best suited to advance the mission — or just the most familiar?
The answer affects more than board performance. It goes to the heart of the organisation’s integrity.
In the For-Purpose sector, where integrity matters most, getting it wrong weakens the organisation and the community it serves.