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What should happen when a nonprofit board learns that its CEO does not actually have the credentials he claims?

Recently in Hartford, CT the 17-year CEO of a nonprofit charter school enterprise resigned pretty much on short-notice.  The reporting source, WFSB on-line, tells that word had circulated that the CEO was not a PhD.  According to the report it's not clear that this is the sole reason for the resignation but for sure, impersonating a PhD can create a number of challenges for an academic institution.

While the CEO's resignation reduces the ability of the nonprofit board to take action, it feels appropriate to indeed ask the question: what would action have looked like if the board did learn that it's CEO was not all he/she claimed to be?  Should a board take immediate action citing that such misrepresentation is not ever acceptable and just fire the individual?  Or, and I don't know the rules, but let's say that 17 years ago when the board hired the CEO, it knew the individual was a PhD candidate and understood that pursuit of completing the degree was eventual.  Maybe the board even accepted use of the title believing it would help in developing the schools and because intention was good, no harm was being done.

But isn't this the crux of the question: has harm been done by using a title that is not valid?  If credentialling bodies consider having a CEO who is a PhD more valuable and they certify accordingly, is this incorrect.  And, if students and parents learn that the head of the school isn't who they think it is, is this ok -- does it not convey a message about "how to get ahead".

A nonprofit board must establish the organization's values and live by these.  If it's CEO turns out to have fabricated their worth via a false representation of their academic status, it would strike me as correct to remove that individual.  And, if the individual removes themselves, does this not also mean that the board's obligations to the individual are lesser as well?  

Yes, harm has been done but is it not offset by the good that was done -- an amazing educational center with significant numbers of children who have performed better than they would have had they not experienced this school and this CEO?

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