Essential Guide to NFP Board Membership Responsibilities
Learn about key aspects of being a Not for Profit (NFP) board member, including legal obligations, roles, responsibilities, and operational guidelines. Understand the duty to act in good faith, strategic decision-making, and how to govern effectively to ensure the organization's success and compliance with the law.
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Presentation Transcript
INK 25: 10 Things to Know About Being a NFP Board Member
{01} Not For Profit Organizations Most Rotary clubs are incorporated as Not for Profit (NFP) organizations This status has some legal advantages, but also involves responsibilities to the law These responsibilities sit alongside our Rotary Obligations
{02} Role of the NFP Board Makes decisions about strategic directions, goals and activities of the organization Monitors the performance of the organization in relation to its goals Oversees Risk Management Oversees the financial sustainability of the club Makes decisions about disciplinary actions Reports to members Ensures the organization operates within the law
{03} Role of Each NFP Board Member Understand the business of the club Attend Board meetings Be active in the organization e.g. attend events Attend the Annual General Meeting Provide advice to inform Board decisions Declare actual or perceived conflict of interest Govern & oversee the club s operations
{04} Board Role C/F Other Roles Board member role is strategic Has to do with Governing the Club NOT the management or operations Projects and activities are run by committees, chairs and co-ordinators - NOT the Board Board NOT involved in day to day running of the club but it delegates authority to Chairs
{05} 4 Legal Obligations of NFP Board Members - Obligation 1 1. Duty to Act in Good Faith and For Proper Purposes Act honestly, fairly and loyally Put interests of club first above self interest Only act for proper purposes i.e. to benefit the organization Be familiar with the Club Constitution
{06} 4 Legal Obligations of NFP Board Members Obligation 2 2. Duty to Act with Care, Skill and Diligence Monitor and make decisions about strategic direction of club Be serious give the role sufficient time, thought and energy Use your specialized skills to assist the Club Be diligent: keep up to date on developments, ask for more information when required, make your own independent decisions after hearing experts
{07} 4 Legal Obligations of NFP Board Members Obligation 3 3. Duty not to dishonestly use your position or information Board members have a position of power and trust and access to confidential information Board members must not use their position to gain advantage for themselves Every decision must benefit the club The position cannot be used to benefit yourself or to in any way harm the club.
{08} 4 Legal Obligations of NFP Board Members Obligation 4 4. Duty to avoid conflicts of interest Conflicts of interest are common having one is not the problem The problem arises when the Board member prefers their own interests (or family interests) above the interests of the club ALL Conflicts of interest must be disclosed as soon as you are aware of them the Club Board must then decide whether you can continue in the decision making process
{09} Liability of Board Members Board members are typically NOT personally liable (i.e. legally responsible) for the debts or consequences of the organization Personal liability MAY apply when: a Board member doesn t take reasonable care to minimize risk of harm A member knew or is reckless about and could have prevented contravening of environment laws
{10} More Information www.nfplaw.org.au (Not for Profit law resources) www.acnc.gov.au (Australian Charities and Not For profits Commission) Associations Incorporation Act 1964, 1981, 1985, 1991, 2001, 2009, 2012, 2015,) A Document with all this information and more will be sent to all Board members
