Fiduciary Responsibilities How to handle difficult situations in your chapter? Marv Nelson SCTE SVP, Strategic Initiatives

Responsibilities of Board Members Duty of Care Duty of Loyalty Duty of Obedience Fiduciary Responsibility

Duty of Care Associations Best Interest Protect Confidential Information

Duty of Loyalty Respect Corporate Opportunities Conflict of Interest

Duty of Obedience Bylaws Compliance Aware of the Affairs of the Chapter

Other Legal Concerns Apparent Authority Antitrust Liability

Example The board has collected member contact information and level of participation in chapter meetings. The list was reviewed at a recent board meeting as a means to determine where support of local operators may be lacking. The list was not marked as confidential and one of the board members provided a copy of the list to a vendor friend. Is there an legal issue with this board member’s action?

Example The chapter plans to hold a Vendor Day event next year. One of the board members has a daughter who has experience in planning functions and has suggested that the board hire her to plan and run the event. Should the board consider this proposal? A motion and second has been made to contract her services, the father has discussed why this would be a good decision and plans to vote in the affirmative for the motion. Is this a legal concern and, if so, what is it?

Example There are multiple MSO/Competitors in our serving area. What is SCTE’s position on membership in the Society? Is the chapter required to send meeting notices to all chapter affiliates in the area? What is the legal concern or issue?

Example The chapter hosted an event at which alcohol was served. Signs were posted throughout the venue warning against driving while intoxicated and alternative transportation would be provided for anyone who desired it. After the event one of the attendees was involved in a vehicular accident and is now suing the chapter. Is the chapter liable? Is there a fiduciary issue here?

Example A board member was elected to the board, but hasn’t attended the last three meetings and has failed to complete assignments as agreed. Can the board member be removed from office even though elected by the membership? Should the board member be removed? What is the legal concern or issue?

Example The board met three months ago to plan technical training for the coming year. One of the board members is an employee of a local training company and the training company has just announced a training program that duplicates one of the topics planned for later in the year and is offering the training at a lower cost than the chapter charges. Is there a legal concern with this?

Example For the last 10 years the board has named its officers by acclimation and there has been no change in the chapter president during this time. One board member who has served on the board for the last four years has an interest in serving as the chapter president and has called into question this process. What is the potential legal issue here?

Example You as a board member suspect that cash is missing from the chapter bank account. Question 1: Should board members receive financial updates from the treasurer? Question 2: What should be the next steps if financial mismanagement is suspected? What is the fiduciary issue?

Example The secretary has agreed to store the chapter’s laptop and projector between meetings. The board recently learned that the secretary used the equipment for a charitable event in which he participated. Is this a permitted use for a 501(c)6 organization? Is there any fiduciary issue with this?

Proactive Prevention How to head off trouble before it happens

Enforcing Board Member Responsibilities Begin before the trouble starts Develop a board member job description Schedule a new board member orientation and leadership training Provide coaching for the chair Establish communications protocols Define and reinforce norms Develop protocols for in-person and telephone meetings Define the relationship between board and committees Maximize board engagement and participation

Enforcing Board Member Responsibilities (cont’d) Anticipate trouble and plan accordingly Timely follow up concerning minimum commitments Who is the enforcer? Warn when participation is becoming unacceptable