Term
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Definition
Member of a Board or committee will not face personal legal liability if they can show they acted in the best fulfillment of their business judgement. |
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Term
Can an organization defend a Board member who gets sued as an individual? |
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Definition
Yes. If a Board member gets sued as an individual, nonprofit can indemnify an individual (defend them) because they were acting on behalf of our organization when they did whatever they're being sued for. |
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Term
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Definition
As a Board member you owe a higher duty to the org than you owe to yourself. You can't put your own interests first, you must operate in the best interest of the organization. |
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Term
Issues related to Honorary Board members |
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Definition
Be careful if they are consulting attorney about anything (advice between lawyer is private, but honorary members can destroy privacy). When meeting w/ lawyer don’t meet w/ non necessary BOD members...this will destroy attorney client privilege. |
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Term
Common types of nonprofit committees |
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Definition
Executive Auditing Fundraising Financial Nominating PR Compensation Governance Compliance Investment Risk Management |
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Term
What does the BOD need to do to create these committees? |
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Definition
Keep minutes of BOD meeting; indicate in minutes who what powers are given to committee and the following: What is the purpose of the committee? What is authorized to do? What not authorized to do? What expectations are? |
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Term
What can BOD legally delegate to committee? |
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Definition
Just about everything… but committee can’t exactly act Committee can’t take action Does the research and CAN make recommendation, but BOD has to authorize the action |
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Term
Ordinary Reasonable Person Standard |
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Definition
As a community we agree what constitutes what is reasonable under the current circumstances Focus is on whether a board member acted reasonably under similar circumstances for org Circumstances are what matters...this is why we say “it depends…” |
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Term
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Definition
based on laws; black letter; Tells us what constitutes reasonable behavior. A judge will follow this. |
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Term
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Definition
common law; not necessary written down, but based on how cases of similar standards were decided. Tells us what constitutes reasonable behavior in the past. A judge will follow this. |
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