Duties and Liabilities of Non-Profit and Charity Boards of Directors
July 27, 2012 - Maytree Foundation
PINs Leadership Development: Duties and Liabilities of Non-Profit and Charity Boards of Directors
“When in doubt, consult an accountant or lawyer who has experience with non-profit associations”
Understanding the roles and responsibilities of an organization’s board members is an essential aspect of every association. On July 26, 2012, TRIEC held a Leadership Development workshop for PINs network leaders on the legal aspects of non-profit and charity Boards. At this evening session, 17 individuals from ten associations learned about the duties and liabilities of directors at non-profit and charitable organizations.
Claudia Falquez-Warkentin - Director and Secretary, Hispanic Ontario Lawyer’s Association (HOLA)
Jessica Gonzalez - Member, Hispanic Ontario Lawyer’s Association (HOLA)
Claudia and Jessica began by explaining the differences between non-profit organizations and charities, and the advantages and disadvantages of being incorporated or non-incorporated organizations. The distinctions between these terms are important to understand when identifying the legal responsibilities of the Board. Claudia and Jessica continued by highlighting the various types of directors (i.e. voting vs. non-voting, ex-officio vs. honorary) and how their responsibilities differ respectively.
Claudia stressed that the primary duty of directors is a fiduciary role - to act primarily on behalf and for the benefit of the organization. In doing so, directors must act in an informed manner, comply in accordance with the organization’s laws and governing documents, stay abreast of the organization’s activities, and exercise judgment and integrity (e.g. avoid conflicts of interest) at all times.
Claudia concluded the session by reminding network leaders that legislation for non-profits and charities every three years, and that organizations must review their by-laws and submit their letters of continuance to keep in line with Canada Revenue Agency and Industry Canada rules and regulations.
- Establish a Code of Conduct for the Board of Directors to ensure that your organization is prepared to deal with issues (e.g. conflict of interest among board members) that may seriously impact your organization.
- Have access to an accountant or lawyer who has experience dealing with non-profit organizations in case situations arise and you need someone to consult.
- How to File a Continuance of an Incorporated Business (Canada Revenue Agency)
- Boards - Get the Clear Before you Fill the Chair (Nonprofit Know How)
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