2. Fiduciary Responsibilities and Governance

3. Risk, Reward, Responsibility
Fun, Rewarding and Challenging
Rarely Boring
Opportunity to Develop Leadership Skills
Responsibilities:
Administrative
Financial
Ethical
Legal

4. Fiduciary Responsibilities
To act reasonably, prudently, in best interests of the organization
To avoid negligence and fraud
To avoid conflicts of interest

5. Fiduciary Responsibilities
All boards must follow
Applies to everything
Keep in mind when making decisions or taking action for the organization

6. Fiduciary Responsibilities
Duty of Care
Duty of Loyalty
Duty of Obedience

7. Fiduciary Responsibilities
Duty of Care
Stay informed and ask questions
The level of competence expected of a board member commonly expressed as the duty of “care that an ordinarily prudent person would exercise in a like position and under similar circumstances.”
Act in best interests of the organization. Be a steward of the organization.

8. Duty of Care What it means: Understand substantive matters
Attend meetings
Ask questions
Followup on unresolved matters
Consult with experts
Read and understand reports given to the Board.

9. Duty of Care
CASE LAW
Stern vs Hayes National Training School for Deaconesses and Missionaries
Board cannot abandon oversight and financial management

10. Fiduciary Responsibilities
Duty of Loyalty
A standard of faithfulness
Show undivided allegiance to the organization’s welfare.

11. Duty of Loyalty
Never use information obtained as a member for personal gain
Act in the best interests of the organization
Support decisions
Comply with “Behavioral Norms”
Most common Duty problem
Conflict of Interests

12. Conflict of Interests
Examples
How do you manage?

13. Fiduciary Responsibilities
Duty of Obedience
Requires board members to be faithful to the organization’s mission.
Act in accordance with law and organization’s governing documents.

14. Financial Responsibilities
Exempt status not a right, can be revoked
In 2010, IRS increased oversight of 501c3s. By 2013, 450,000 orgs had lost c3 status by simply not filing 990 forms.
Unrelated business income must be reported properly.

15. Thoughts on Transparency

16. Direction Board Legal Roles & Responsibilities
Engage in strategic thinking and planning
Set the organization's mission and vision for the future
Establish organizational values
Approve budget operational plan
Protect the organization
Direction

17. Ensure necessary resources
Board Legal Roles & Responsibilities
Hire capable executive leadership
Ensure adequate financial resources
Promote positive public image
Build a capable and responsible board
Ensure necessary resources

18. Provide oversight Board Legal Roles & Responsibilities
Oversee financial management
Minimize exposure to risk
Measure progress on strategic plan
Monitor programs and services
Provide legal and moral oversight
Evaluate the CEO & Board
Provide oversight

19. General Governance Best Practices
Have 6 months operating reserve
Invite incoming board members to participate as observers
Offer leadership training
Conduct detail performance assessments, Board and Exec.
Developing new leaders
Data driven decision making
Role clarity
Crisis planning

20. Excellent Resource
Governing for Growth by Nancy Axelrod