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Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 1
Building BRIDGES to More Effective Board Governance
Project BRIDGES Board Retreat September 19, 2011
Ken Liu Gammon & Grange, P.C.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 2
7 BRIDGES to a Better Board
Topics
1. Board Basics
2. Risk management
3. Informed Boardsmanship
4. Duties of care and loyalty
5. Governing interested party transactions
6. Evaluation of legal compliance
7. Staff-Board roles and relationships
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 3
1.1 Board Basics: What is A Director?
The individual director: Acting alone has no powers, unless expressly authorized
by the Board Exerts his or her power by voice & vote when the entire
Board is duly convened Shares in all the powers and responsibilities of the
Board
The Board has a collegial governance power
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 4
1.2 Board Basics: Who are the Directors’ Constituencies?
A director is accountable to: Constituents/Members: Those whom the organization
serves Donors: Those who support the organization The general public (essence of being public charity) The law: State and federal governments The entity’s Articles, Bylaws, Policies, Budget, etc. The Board of Directors -- each other The Lord (Matthew 12:36 (ESV) I tell you, on the day of
judgment people will give account for every careless word they speak . . .)
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 5
1.3 Board Basics: What are the Directors’ Purposes?
A director serves the purposes of the organization
and ensures organization’s activities are serving those purposes
Where are these purposes found? Articles of Incorporation Bylaws Mission Statement The Bible
All activities should be consistent with purposes
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 6
1.4 Board Basics: BRIDGES’ Purposes Statement (in Articles & Bylaws) Articles and Bylaws purpose statement: The Corporation seeks: to develop a network of churches and faith-based
organizations to combat social and spiritual problems in local communities,
facilitate programs and support services that strengthen the capacity of churches and faith-based organizations to combat these problems, and
provide resources, education, and training to churches and faith-based organizations to help them strengthen and expand their capacity to relieve poverty, serve the needy in their communities, and provide Biblical solutions to the heart issues underlying the social and spiritual problems the Corporation seeks to combat.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 7
1.5 Board Basics: Primary Sources of a Director’s Legal Duties
Articles of Incorporation Bylaws D.C. Nonprofit Corporation Law Federal tax exempt law / IRS regulations “Common Law” duties
Duty of care Duty of loyalty
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 8
2. Risk Management Quiz
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 9
Risk Management Quiz
1. Is it permissible for a nonprofit corporation (like Project BRIDGES) to make a loan to an officer or director on terms that favor the nonprofit (e.g., agreement provides that nonprofit is to receive greater than fair market value interest)?
YES, under federal law and IRS regulations; but BUT NO, under D.C. law. Any and all loans to a
nonprofit’s directors and officers are prohibited
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 10
Risk Management Quiz
2. Are nonprofit boards required to adopt a budget process?
No, but it is strong recommended! No law requires a budget, but the budget is one of the most important tools of financial accountability whereby Board fulfills fiduciary responsibility. Best practices would require a complete budget process.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 11
Risk Management Quiz
3. Is it advisable for a large nonprofit Board to carry on most of its work through a small executive committee that determines compensation issues and approves related-party transactions?
NO: Executive committee can handle routine matters
between Board meetings; but should not take over Board’s authority for big ticket decisions: e.g., approving large contracts, new program areas, affiliations, sale of significant assets, related-party transactions, etc.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 12
Risk Management Quiz
4. May a nonprofit Board choose not to have term limits in its bylaws?
YES: But it is generally advisable to limit director terms to help keep directors accountable, and Board vibrant and responsive to constituencies. Best practice NGOs have term limits.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 13
Risk Management Quiz
6. Should a Board member personally review employee performance appraisals and instruct employees on job performance?
NO, unless the director also has a hat as an officer, or is specifically authorized to do so, say in a smaller entity. This is not only micromanaging, it could be usurpation of the CEO’s authority. Directors are not operating officers of the nonprofit, and generally have no authority to act for the entity between Board meetings.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 14
Risk Management Quiz
7. Does D.C. law grant immunity from liability to directors of nonprofit organizations?
YES, BUT LIMITED: D.C. law grants civil (not criminal) immunity, unless the director’s act leading to the injury: is willful misconduct, results in improper personal benefit, exceeds the scope of his authority, or if the nonprofit doesn’t meet certain expense and
insurance tests
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 15
Risk Management Quiz
8. If a director or officer of a nonprofit organization publicly endorses a political candidate because of the candidate's stand on moral issues (e.g., faith based initiatives, human rights, etc.), could the organization lose its tax-exempt status for impermissible political activities?
YES: Political campaign activity is absolutely prohibited.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 16
Risk Management Quiz
9. Can a 501(c)(3) nonprofit lose its tax-exempt status for lobbying activities?
NO: IF the lobbying is “non-substantial.” Definitely less than 5%; maybe less than 20% or higher IF
done with volunteers.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 17
Risk Management Quiz 10. If BRIDGES does not fund any Muslim projects or
groups, must it worry about compliance with the Anti-Terrorist Funding Provisions of the USA Patriot Act?
YES: Patriot Act: criminal liability for providing material support or funds, for use in terrorist act
USAID grant recipient must certify it has taken all reasonable steps to ensure it does not and will not knowingly provide material support or resources to any entity that commits or supports terrorist acts
Combined Federal Campaign participants must certify that they do not knowingly support any persons or organizations on the terrorism lists of the U.S., U.N., or European Union
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 18
3. Informed Boardsmanship
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 19
Informed Boardsmanship
1. Are Board members familiar with the organization's mission, purposes, objectives, policies, statement of faith, programs, and activities?
Clearly Articulate Your Mission & Values and Communicate your organization’s activities to the broader
community
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 20
Informed Boardsmanship
2. Are Board members committed to the organization's mission, purposes, objectives, policies, statement of faith, programs, and activities?
Are they qualified to implement its goals? Take steps to encourage full participation by all Board members Recruit Board members who:
Embrace and are passionate about, the mission and purposes Are qualified to implement goals Reflect the diversity of your organizational culture: race, gender,
professions, experience/background, skills
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 21
Informed Boardsmanship
3. Are Board members adequately informed about the Board's responsibilities and liabilities?
Before new people join board, need to adequately
prepare them for expectations, legal responsibilities and liabilities.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 22
Informed Boardsmanship
4. Does the Board regularly evaluate the use of its resources to ensure they are effectively used to further the organization's goals?
One of the Board’s biggest responsibilities is ensuring the organization’s money, staff and volunteers, intellectual property, and other resources are properly used.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 23
Informed Boardsmanship
5. In recognition of its public trust, is the Board accountable to the community for the organization's success in carrying out its mission and meeting its ethical and legal obligations?
Community = donors, beneficiaries, constituents, and government authorities
Annual audit; publicly available? Board should be familiar with Form 990 Consider ECFA Membership (www.ecfa.org) Watch the watchdog groups, such as:
www.charitynavigator.org www.bbb.org/us/charity
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 24
Informed Boardsmanship
6. Does the Board conduct periodic opportunities for training, education, and upgrading of needed skills for its members?
A properly trained and managed Board is one of the most
effective safeguards against legal liability. Nonprofit Board members need to be instructed as to their
fiduciary duties to the corporation, the unique requirements of a nonprofit organization, and restrictions on transactions due to the limitations on private benefit and inurement, unrelated business activity, legislative and political activity, etc.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 25
Informed Boardsmanship
Keep abreast of latest legal developments affecting
nonprofit organizations Sample resources for Board training
ECFA: www.ecfa.org Christian Leadership Alliance
www.christianleadershipalliance.org BoardSource: www.boardsource.org Independent Sector: www.independentsector.org Gammon & Grange: www.gg-law.com
Sign-up for G&G Law Alerts™
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 26
Informed Boardsmanship
7. Does the Board run effective and efficient meetings that address the needs of the organization?
Provide timely and effective reports in advance of
Board meetings Board meetings must be used for furthering the goals
of the organization, not specific interests of individual Directors
Divide Board's work between individual Directors, committees, and entire Board
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 27
Informed Boardsmanship
Require absent Directors to review minutes of any
Board meeting missed, and to register their dissent when in disagreement with any Board action
Annually assess Board's effectiveness, providing for procedural changes, training, and education
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 28
Informed Boardsmanship
8. Has the Board developed purposeful policies & procedures?
Develop efficient procedures, but don’t let them supersede strategic thought and action
Develop risk management policies and strategies in consultation with legal counsel
Implement accounting and fiduciary guidelines
Implement conflicts of interest policy
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 29
Informed Boardsmanship
9. Does the Board have an effective budget process?
Coordination of budget with organization's purposes, mission, and strategic plan
Line-item breakout of all significant categories of expenses and income
Review monthly financial statements, including budget projections, comparisons, and line-item variances
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 30
Informed Boardsmanship
Review detailed breakout of new activities or projects Follow policy of red flagging any line item that is
more than 5 percent (5%) above budget, and prohibit such expenditures without special Board approval
Insist on annual audit
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 31
4. Duties of Care & Loyalty
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 32
4. Duties of Care & Loyalty
Two fundamental duties of a Nonprofit Director:
Duty of Care Duty of Loyalty
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 33
Director is a fiduciary – Director must at all times act for the benefit of the organization, in its best interests and to further its exempt purposes
"A director shall perform his duties as a director,
including his duties as a member of any committee of the board upon which he may serve, in good faith, in a manner he reasonably believes to be in the best interest of the corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances.”
Model Business Corporation Act (MBCA), 35.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 34
4.1 Duty of Care
Duty of care A Director should:
(1) be reasonably informed; and (2) exercise independent judgment; (3) to participate in corporate decisions; (4) in good faith; (5) with the care of an ordinarily prudent person in
similar circumstances.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 35
4.1 Duty of Care
Regularly attend all meetings of the Board
Directors can only act as a group (the Board) Board benefits from individual and collegial insights
and group discussion D.C. law and BRIDGES’ Bylaws (8.5) permit
participation by electronic means, so long as everyone can hear and participate
D.C. law and BRIDGES’ Bylaws (8.6) also permit Board action by unanimous written consent, without a live Board meeting
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 36
4.1 Duty of Care
Each Director is obligated to: Obtain all information needed to participate in informed
way with regard to every matter requiring Board action May rely upon information received from the following
sources if the director reasonably believes the source to be reliable and competent Officers and employees of the corporation Professionals and experts – lawyers, accountants, etc. Committees of the Board BRIDGES’ members and their pastors
Review and understand all documents submitted to Board Request additional information whenever necessary
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 37
4.1 Duty of Care
Each Director is obligated to: Exercise independent judgment on all corporate
decisions – no rubber stamps Director can be liable even if he remains silent in the
face of improper Board action To avoid liability, Director must actively dissent on
the record Responsibly exercise delegation
Board manages the corporation, but does NOT manage day-to-day operations Board sets policies Day-to-day operation is function of management
(officers, employees, agents)
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 38
4.1 Duty of Care
Responsibly exercise DELEGATION. Board can delegate its duties to committees of the
Board Can delegate actual Board authority IF committee
composed only of current Board members. “The designation and appointment of any such
committee and the delegation thereto of authority shall not operate to relieve the board of directors, or any individual director, of any responsibility imposed upon it or him by law.” DC Code §29-301.22
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 39
4.2 Duty of Loyalty
Duty of Loyalty requires that BRIDGES’ directors at all times act in BRIDGES’ best interests and not for their own personal interests
Three aspects to the Duty of Loyalty:
Corporate Opportunity Confidentiality Conflicts of Interest
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 40
4.2 Duty of Loyalty
“Corporate Opportunity” - when a director knows that he or she can participate in a transaction that would plausibly fall within BRIDGES’ present or future activities
What should the director do? Affirmatively present the opportunity to Board, BEFORE participating in the transaction, and let the Board determine that it wishes to abstain from
the opportunity (i.e., ROFR) Always document this fully (e.g., in the minutes of the
Board meeting) showing the conflicted Director was recused from final
discussion and voting.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 41
4.2 Duty of Loyalty
Director should treat as confidential all BRIDGES-related matters unless There has been general public disclosure; or The information is a matter of public record or
common knowledge
Directors are not ex officio spokesmen for BRIDGES Disclosure of matters risks waiving applicable
privileges (e.g. attorney-client privilege)
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 42
5. Governing Interested Party
Transactions
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 43
5. Governing Interested Party Transactions Conflicts of interest arise whenever a Director (or
senior manager with decision-making influence) has a real or apparent personal interest in a proposed organizational transaction
Conflicts of interest transactions must be properly
handled to avoid self-dealing Self-dealing arises whenever the personal interest or
the interest of a family member, friend, or other organization in which a Director is involved takes precedence over BRIDGES’ best interests
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 44
5. Governing Interested Party Transactions To avoid prohibited conflicts of interest, the Board
should adopt and consistently follow a conflicts of interest policy
A good conflicts of interest policy takes into account
restrictions on private benefit / private inurement, and IRS regulations on “Intermediate Sanctions” for excess benefit transactions
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 45
5. Governing Interested Party Transactions Private benefit:
benefit to private person or entity, unrelated to exempt purposes, and not resulting in substantially equivalent benefit to
organization Private inurement:
private benefit to an insider (an individual who has significant
influence over the organization) or to a person or entity closely related to an insider
receives benefits greater than she or he provides in return
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 46
5. Governing Interested Party Transactions “Intermediate Sanctions”
the IRS can impose a penalty “excise tax” on an “excess benefit transaction” Involving a “disqualified person”
Sanctions can apply to both: The disqualified person, and The managers (including directors) who approve the
“excess benefit transaction”
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 47
5. Governing Interested Party Transactions Questions to ask to avoid conflict of interest:
Was there full disclosure to the rest of the Board? Was there unbiased decision-making by the Board? Was the transaction fair to the organization overall? Even though the transaction involves an apparent conflict
of interest, when all the facts are known, is there a demonstrable absence of self-dealing?
Was personal appropriation of all corporate opportunities avoided?
Was any interested director properly insulated from final discussion and voting?
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 48
5. Governing Interested Party Transactions IRS recognizes rebuttable presumption that
transaction is reasonable if: approved by governing body composed entirely of persons
without conflict of interest (recuse interested directors from final discussion and voting);
Board relies on appropriate comparability data for determining reasonable compensation or other FMV of benefit received or provided
basis for approval, and comparability data, were contemporaneously documented by Board
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 49
6. Evaluation of Compliance and Risk Management
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 50
Sarbanes Oxley (SOX)
1. Have a written document retention and periodic destruction policy
2. Develop and adopt whistle-blower policy. 3.Establish a conflict of interest policy 4.Independent and competent audit committee (or at least
an annual audit) 5.CEO and CFO should sign off on all financial statements
including Form 990 6.Disclose financial statements (Form 990)
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 51
6. Evaluation of Compliance and Risk Management Charitable Solicitation In most states, nonprofits must register to solicit charitable
contributions Religious organizations are exempt from D.C. registration
requirements, but such exemption must be claimed and affirmatively granted through the Dep’t of Consumer and Regulatory Affairs
Religious organizations are also exempt from Maryland registration requirements, but must submit evidence of entitlement to the exemption to the Maryland Secretary of State
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 52
6. Evaluation of Compliance and Risk Management No substantial lobbying is allowed
“Lobbying”: advocacy of passage or defeat of
particular legislation Insubstantial lobbying is acceptable
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 53
6. Evaluation of Compliance and Risk Management No political campaign activity allowed
“Political campaign activity”: advocacy of election or defeat of a candidate for public office
This is an ABSOLUTE prohibition Can lose exempt status for violation
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 54
6. Evaluation of Compliance and Risk Management Intellectual Property Conduct searches of names before adopting Consider federal trademark registration of key names,
logos Do not allow 3rd parties to use names, logos, w/o license Have contracts to own IP in works created by
independent contractors Include clause protecting proprietary information in all
contracts
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 55
6. Evaluation of Compliance and Risk Management Financial audits
Establish audit committee to engage outside auditor Use RFP process every 3 to 5 years After audit is completed, conduct comprehensive
exit interview with auditor(s)
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 56
6. Evaluation of Compliance and Risk Management Legal Audits The Gammon & Grange Legal Audit Questionnaire™ ("LAQ")
enables a nonprofit organization to take a significant, self-directed step in assessing its legal health. Diagnoses the organization’s legal strengths and weaknesses and developing a plan for improving legal compliance and risk management
An ounce of legal checkup is worth a pound of litigation
“cure”.
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 57
7. Staff/Board Roles and
Relationships
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 58
Staff/Board Roles and Relationships
Project BRIDGES’ structure: Governed by Board of Directors Managed by officers
Founder & Co-Founder: vision-casting, representing BRIDGES to its constituencies and communities
Board Chair: presides over meetings of Board President: manages BRIDGES’ day-to-day activities Secretary: keeps Board meeting minutes, corporate
books & records Treasurer: oversees all financial activity
Supported by members (mostly churches; members have no governing voice or vote)
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 59
Staff/Board Roles and Relationships
Boundaries: Board: decides the ENDS (i.e., goals and objectives) Exec. Dir. and Staff: decide the MEANS
Board should provide clear parameters on the means the E.D. and staff may use to achieve the Board's ends
Within those policy parameters, give the E.D. the discretion to use his creativity and professional skills to achieve the Board’s ends
Board chair and Executive Director share leadership of the organization – Chair in setting longer term goals, E.D. in running operations
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 60
Staff/Board Roles and Relationships
Know When to Delegate Create an Executive Committee & determine in
advance (bylaws, etc.) what the EC can decide between board meetings.
Develop effective committees Which committees are necessary or helpful? Who can serve? Who should chair? Who appoints or elects members? What is the committee’s role? Who staffs the committee?
Create an advisory group with ensured term limits for volunteers
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 61
Staff/Board Roles and Relationships
Evaluation of Board Member Performance
Engage in annual self-evaluation through key questions submitted by Board anonymously
Engage in periodic peer evaluation: Board members evaluating Board members, or Board development committee
Engage in accountability by inviting staff members to assess whether Board members are in touch with the reality of nonprofit’s challenges
Submit to professional evaluation and advice of board development committee
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 62
Staff/Board Roles and Relationships
Evaluation of Board Member Performance
Board members performance issues to evaluate:
Attendance
Preparation
Constructiveness of contributions
Loyalty
Record as donor
Fundraising assistance
Representation before public
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 63
Leadership
“Leadership is not about titles, positions or flowcharts. It is about one life influencing another.” ― John C. Maxwell
“the Son of Man did not come to be served, but to serve . . .”
- Matthew 20:28
Project Bridges Board Presentation • © Gammon & Grange, P.C. 2011 www.gg-law.com 703-761-5000 • Sept. 19, 2011 • Slide 64
Kenneth Liu Gammon & Grange, P.C. 8280 Greensboro Dr., 7th F McLean, VA 22102 703-761-5000 [email protected] www.gg-law.com
© 2011 Gammon & Grange, P.C. The content in this presentation is
provided for general informational purposes only and does not constitute legal advice. This presentation may be freely distributed in full without modification.