1. Fiduciary Duties & Other Legal Issues Patricia May, CAP-OM President, DE-MD-DC Division

2.  Owed to the organization by officers and directors  Three primary duties Fiduciary Duties

3.  Faithful to the purpose and goals  Unlike for profit corporations, nonprofits defined by their objectives  Representations made to governmental agencies Fiduciary Duties Duty of Obedience

4.  Reasonably informed,  Participate in decisions, and  Do so in good faith and with the care of an ordinarily prudent person in similar situations. Fiduciary Duties Duty of Care

5.  Common law doctrine  Even when a decision has proven to be unwise or unsuccessful, a director will be protected from liability if  acted in good faith  in a manner reasonably believed to be in the best interest of the corporation  with independent and informed judgment. Fiduciary Duties Business Judgment Rule

6.  a court will not second guess decisions that are:  reasonable,  informed and  made in good faith Fiduciary Duties Business Judgment Rule

7.  conflicts of interest,  corporate opportunities and  confidentiality Fiduciary Duties Duty of Loyalty

8.  act in the best interests of IAAP  NOT in your interest or that of another organization Fiduciary Duties Conflict of Interest

9.  NOT inherently bad  follow proper procedure:  full disclosure  recusal  approval by disinterested directors Fiduciary Duties Conflict of Interest

10.  prospect, idea or investment,  related to activities of IAAP,  knew, or should have known, of interest to IAAP Fiduciary Duties Corporate Opportunity

11.  A director may take advantage of opportunity after:  disclosure to IAAP  rejection of opportunity Fiduciary Duties Corporate Opportunity

12.  necessary for good governance  presumption of confidential treatment  Certain information should always be kept confidential, such as:  information received from legal counsel;  pending or threatened litigation;  personnel decisions;  negotiations with a third party;  executive session. Fiduciary Duties Confidentiality

13.  Certain information should always be kept confidential, such as:  information received from legal counsel;  pending or threatened litigation;  personnel decisions;  negotiations with a third party;  executive session. Fiduciary Duties Confidentiality

14.  Corporate Governance - Authority  Contracts  review process  signing authority  Insurance: D&O vs. General Liability Other Legal Issues