I recently had to demote the self-volunteered chair of our spring carnival. Like mom2, this was one of the hardest things I've had to do as a PTO officer, but the hand-writing was on the wall. She came in very enthusiastically, having chaired a similar event (so she thought) at her child's old school. Very quickly, however, the assistant chair found her to be negative, confrontational, and slow to act. Not a good attitude for a major, financially risky event. I met with the mom in question, the assistant, and last year's chairperson who was acting as advisor. We reviewed in detail all the tasks and nuances of the project. At the conclusion, I looked her in the eye and asked her if the project at our school was bigger than she expected. She really didn't have much to say, but her body language told me she knew she was in over her head. I then laid it right out: I reassigned the chair position to the assistant (who has lots of volunteer experience at our school), and "demoted" the new mom to assistant. I encouraged the new mom to learn from the old mom, and to take ownership for prize acquisition, a task she has strong experience in. Perhaps the new mom will be able to chair the event next year, after a year in the assistant seat.
I guess my advice to you, Pabby, from my experience, is to review the job expectations with your volunteer. I have found that alot of times when someone "fails" in their role, it's because their defination of the job isn't the same as what the board thinks the job entails. It goes back to the old saying, what happens when you AssUMe... It's hard to pull someone back onto the "right" path after they've gone down what they think is the right path, but that might solve your problem. Either she'll realize the job isnt' what she thought it was and resign, or she'll do it the way it needs to be done.
We tried very hard this year to reduce the risk of unmatched expectations by writing very detailed job descriptions for each of our chairpeople. Obviously, that didn't work in the case of our carnival commitee (above), but it least it gives us something to point to when a chair falls down on the job.