why do associations exist? individuals united by a common interest or concern coming together to...
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Why Do Associations Exist?
Individuals united by a common interest or concern
Coming together to accomplish something it would be impossible to accomplish alone
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1.8 Million Associations in the United States Alone
86,000 trade and professional associations
1 Million philanthropic or charitable
More than 1,000 new associations formed each year
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There Is An Association For Everything (Examples Drawn from National Groups
Only)
International Staple, Nail and Brad Association
Specialty Fastener Association
American College of Obstetricians and Gynecologists An additional 12 national groups representing
specialties within the field
Frozen Potato Products Institute
Society of Investigative Dermatologists
Society of Dance History Scholars
American Society of Association Executives
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Associations Are (Generally) Corporations
Not for profit Corporations Under State LawMembers instead of shareholders or owners
Federal Tax Exempt Status501 (c)(6): Business League501 (c)(3): Charitable, Scientific, EducationalPAC/527: Political
No part of its net earnings inure to the benefit of any private shareholder or individual
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As Directors or Officers of a Not For Profit Corporation…
You still need to operate in a business-like manner and bring in more dollars than you spend
You face the same legal obligations that directors of a for profit corporation face
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Legal Duties Duty of Care
Act honestly, reasonably and diligently Stay informed; ask questions
Duty of Loyalty Act in interests of the association
Not self/business
Not state/region
Not professional sector
Avoid conflicts of interest Support the Board once a decision has been made
Duty of Obedience Act in accordance with mission Consistent with policies, procedures and positions
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AntitrustNo discussions that could be
construed asRaising, lowering or stabilizing
prices or fees
Restricting availability of services
Allocating markets, territories or customers
Encouraging boycotts or exclusions of persons
Even when this means appearing to condone business practices that are fully legal, but distasteful
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Antitrust (cont.)Noerr-Pennington
Doctrine
Safe-harbor immunity protection
Protects lobbying efforts to change laws and official rules
Protects good faith litigation
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Revised IRS Form 990Good Governance Practices
Regulation by Question:
Conflict, Whistleblower & Document Retention/Destruction Policies (SOX)?
Minutes of Board & Executive Committee Meetings?
Compensation procedures & disclosures?
Board review of Form 990 before filing?
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Revised IRS Form 990Good Governance Practices
(cont.)
Review, Compilation or Audited Financial Statements (w/Audit Committee)
Public availability of governance docs, 990, financials
Business & family relationships between directors, officers and key employees
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Conflicts of InterestLegitimate dualities of interest exist, which may
or may not create an actual conflict.
A conflict is created where a director has a direct or indirect interest, financial or otherwise, in a matter involving your association
Financial investment or interest
Management position
Leadership role with decision making authority
Volunteer or for compensation
Actual or Perceived
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Conflicts of InterestThe Board not the individual
determines if a conflict exists and determines the appropriate remedy.
Remedies:Disclosure
Recusal
Resignation
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Due ProcessApplies to conflicts and all other association
actions (e.g., membership, complaints, other disagreements
Decisions should be fair and reasonableNOT arbitrary and capricious
Persons likely to be adversely affected by actionOpportunity to be heardFair and impartial decision-maker
Fair and most likely to lead to the right conclusion
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Board & Member VotingBoard
Duties cannot be met if there was not an opportunity to deliberate
Three permissible modes In person at meetingBy teleconferenceUnanimous written consent w/o meeting
No voting by proxy or mailProvisional action: ratified at later date
Membership (more lenient)Mail, electronically (online or email),
in person, by proxy as designated in Bylaws & allowed by state law
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The “Business Judgment” Rule
You don’t have to be right
You must act with due careHonestly and sincerely to the best of your
abilityOn an informed basisIn good faith and the best interests of the
association
Even if you are wrong, you cannot be held personally liable/legally responsible
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Insurance & Liability Issues
For Directors, Officers, Entity, Staff & Volunteers
D&O/APL for economic claimsHR; Defamation; Plagiarism; etc.Shared limits policy available thru NCRA
General Liability/Business PackageAccidents – 3rd Party BI/PD claimsOffice property Sometimes theft and fiduciary coverage
HR accounts for the vast majority of claims
Invest time and resources in education & prevention
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Manager vs. Leader
Give some words to describe the kinds of functions and activities Managers should be focused on and engaged in.
Give some words to describe the kinds of functions and activities Leaders should be focused on and engaged in.
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The Overly Simplistic Answer
Leaders:Set PolicySet DirectionDefine Outcomes
ManagersFollow DirectionsDo the WorkAchieve the Outcomes
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Which are you supposed to be?
ManagerLeader
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Making Board Agendas More Effective
Organize Agenda by Topic AreaAround Strategic-Planning GoalsAround Subject Area Or Long Range Goals
Separate Issues by Nature of Action RequiredFor Information Purposes OnlyBoard Decision Is Necessary
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Consent Agenda & Minutes
Consent Agenda
Presented as a Whole: Approved in a Single Motion
Any Board Member May Ask for Any Item to “Be Removed from the Consent Agenda”
Does not require a vote.
Items Removed from Consent Agenda are discussed and voted on as an individual agenda Item
Prepare minutes of actions not transcripts of the discussions
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Dealing with Emotional/Controversial Issues
Seek first to understand/then to be understoodWhat is perceived isPerspective
Acknowledge and respect validity of personal emotions
Create a fact base and build as far as you can from there
Understand the importance of context
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People judge others based on their behavior; they judge themselves based on their
intentions.Stephen M R Covey The Speed of Trust
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Data, Data, DataAre you making decisions based on what you
know or on what you think you know?
Worse still: Are you making decisions based on what you wish were so?
Ask, Ask, AskMore than just formal surveys
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Pitfalls to AvoidConclusions based on a
sample of oneParticularly when that “one”
is “you”
Giving too much weight to "Internet Utterances"Missing the existence of the
silent majorityThe Internet Echo Effect
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Your Community is Your Own Best Resource
State Leadership Bulletin
State Leadership Network
NCSA
State Editors Newsletter
Leadership
NCRA Staff
Etc.
You are not alone!
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What about the questions we didn’t get
to?
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