Senate OKs bill banning pay for nonprofit boards [Boston Herald]

May 28--After roughly six years of trying to reel in lavish executive pay at certain Bay State nonprofits, state Sen. Mark Montigny's proposal to ban those public charities from paying their boards of directors is a step closer to reality.

Attached as a budget amendment that the Senate approved Friday, the proposal seeks to do away with a wink-and-nod system that allows directors to show up at a few meetings per year, earn a giant paycheck and too often sign off on hefty salaries for their CEOs.

"It simply says if you're a charity, you're not going to pay people for the privilege and prestige of sitting on a board and coming to a few meetings per year," said Montigny (D-New Bedford), who noted that the bill only targets entities that receive taxpayer money and that he had to pare down his original proposal in order to secure passage.

Attorney General Martha Coakley heralded the Senate's move. "Voluntary service by board members is the practice at the overwhelming majority of public charities, and for good reason," Coakley said. "Compensation of board members raises concerns about maintaining board independence and ensuring the proper use of charitable funds."

The Herald reported in March 2011 that directors at Blue Cross Blue Shield of Massachusetts received as much as $90,000 a year. None had objected to the $11 million payout to a former CEO who presided over staggering losses. An investigation by Coakley found no justification for nonprofit health insurers to continue paying their board members, a practice that Blue Cross and Fallon Community Health Plan have since ended.

The bill needs to be passed by the House and signed by the governor.

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