of the GrandLodgeStatutes Guide For Board Of Directors —Section16.020— of the GrandLodgeStatutes Fidelity Brotherlylove

This presentation is to give an overview of corporate organization and operation. It is directed at general not for profit corporations as applied to Tennessee Elks corporations within which all Lodges operate. All corporations are governed in Tennessee, under T.C.A. title 47, but the Elks have a further set of rules and guidelines found in the Laws of the Order Section 16.020 and 16.030

Background The members of Lodges have a right to select the business entity under which they operate. It is to the benefit of Tennessee Elks Local Lodges to incorporate for restriction of liability and without impact to their blanket exemption under the Internal Revenue Code Section 501. Corporations are legal entities unto themselves. The possess the legal power to sue and be sued, to be taxed, and to exist in perpetuity (until dissolved). Corporate liability extends only to the assets of the corporations. The shareholders, member, Board of Directors and Officers do not share the liabilities of the corporation.

DIRECTORS VS TRUSTEES In 2011, at the annual convention, Elks members voted to make one word change to the Statute I mentioned GLS 16.020, changing “may” to “shall”. With this change the practice then in place to have the Lodge Trustees perform control over the property of the Lodge was merged into the Board of Directors. Technically the Board took over the duties assigned the Trustees by the Laws of the Order, specifically, GLS 12.070. See 12.070, for a complete explanation of the various duties of the Trustees. In practice, the Trustees (often called the Board of Trustees) are members of the Board so they still a part of their original duties, but the Board also adds the four chair officers to the now Board of Directors. The Lodge is still governed and controlled by members.

OBLIGATIONS OF THE BOARD Prior to formation the area member of the Committee on Judiciary must review and approve the corporate documents for compliance with the Elks requirements 2. All members in good standing are members of the corporation 3. In February annually, new Officers are elected, the four chair officers and the Trustees are by virtue of their offices are the Board of Directors of the corporation 4. The new Board shall elect a Chairman and Secretary amongst themselves. 5. The Board members retain their positions which they have in the Lodge 6. In general terms the Board makes decisions at meetings and notice is given the membership of meetings which shall have a quorum present, and the chair votes

OBLIGATIONS OF THE BOARD (CONTINUED) 7. Chairman must attend all District Deputy clinics, but if the Chairman is unable then the Leading Knight shall take his place and another member attends also 8. The Board controls the property, funds, and investments of the Lodge, but subject to the approval of the Members. It may not spend w/o approval of the Members, and even if certain amounts were approved as part of the Lodge budget any actual expenditure of such amounts must still be brought to the Members for approval. The Board acts at the direction of the Membership. The Board must also be aware of the reporting and approval of GLS 16.050, under which the Local Lodges must seek Board of Grand Trustees approval 9. The Board must present a budget not later than the last meeting in April. It is not an authorization to spend money, but a limitation on spending funds of the Lodge

OBLIGATIONS OF THE BOARD (CONTINUED, 2) 10. The Board has no authority of the operation of the club facility. See GLS 16.040 11. The Board may/maynot oversee facility rentals depending on arrangement of the Club manager and House Committee, and it is part of the operating budget 12. Conduct an annual inventory of Lodge property to assess conditions and urged to take a video in case of catastrophic loss 13. Hold monthly meetings with notice to the membership so they can attend. Minutes must be taken and approved; until approved the acts within the minutes they have no impact and remain under the Jurisdiction of the Board 14. If Lodge by-laws designate the Trustees as managing body of the club then the Trustees (only) serve in that position

OBLIGATIONS OF THE BOARD (CONTINUED 3) 15. It is important that the Board remain a separate entity 16. Maintain an Accident Prevention Program and designate a Manager 17. The Board has little control over employee relations and hiring/firing 18. The Board must not obstruct the Audit and Accounting Committee 19, The Board must monitor budgetary compliance 20. Mindful and respect other officer’s duties

HOW DOES GLS 16.020 RELATE TO 12.070? In a Lodge that has incorporated the Board of Directors takes over the Duties of the Trustees (often called the Board of Trustee. The Board Of Directors may be assigned further duties as may the Board of Trustees so long as the duties do not conflict with the statutory duties of either group. ANY QUESTIONS?