[NFBOH-Cleveland] Legal Responsibilities of Non-Profit Board Members

Tue May 25 21:02:50 UTC 2021

Ohio Leaders, Chapter Presidents and All Executive Boards,

Please review this great article that was in the Ohio Buckeye Bulletin.

If you ever had a thought why you should be present at meetings or why you
should be active in the organization? Here is your answer!

So, I am hoping to see everyone tomorrow night!

Legal Responsibilities of Non-Profit Board Members

by Todd Elzey <>

Editor's note: Todd Elzey is the treasurer of the NFB of Ohio. During our
recent leadership seminar he reviewed the legal duties of board membership.
We thought that this was important enough information that we asked him to
put it in writing for everyone to read and think about. He is speaking about
affiliate board membership, but these principles hold true for chapter and
division board membership. This is what he says:

It is an honor to be elected to an NFB board position. NFB board membership
says that the members believe that your leadership can contribute to the
success of the NFB. But board membership is more than just an honor. It is
also a lot of work.

Newly elected board members often do not understand all of their duties. NFB
board members have the same duties as members of any large non-profit
organization board. They even have many of the same duties as members of a
major corporate board. Some duties of non-profit board members are required
by State and Federal law. This article will outline some of the legal duties
of NFB board members.

A Fiduciary Duty:

Non-profit board members have a fiduciary duty to the organizations they
serve, which means that board members are legally obligated to act in the
organization's best interest. This means that the NFB's best interests come
first. Board members must put the NFB's interests even ahead of their own
personal interests. This obligation includes all actions the board is
involved in, including financial matters.

There are four fiduciary duties in Ohio that NFB board members must comply
with. These are the duty of care, the duty of loyalty, the duty of
compliance, and the duty to maintain accounts.

Duty of Care:

The duty of care requires board members to participate actively in the NFB's
activities. Board members must also use skill and care in making decisions.
The law says that board members must use the same skill and care that is
used by a prudent person conducting their own business. So what does this
mean? NFB board members must attend and participate in NFB meetings and also
prepare for meetings in advance.

The duty of care also requires board members to know about what is going on
in the organization. Board members cannot make well-informed decisions
without knowing what is happening in the NFB.

NFB board members must also participate in NFB activities outside of board
meetings. So they should be participating in fundraising, helping with
educational activities, helping promote the organization, and generally
contributing to the organization's success. They should participate in
training opportunities. Training develops the knowledge and skills a board
member needs to make well-informed decisions for the organization.

Duty of Loyalty:

The duty of loyalty requires board members to put the NFB's interests first.
They cannot take any action that conflicts with the interests of the NFB.
They must put the NFB's interests even before their own personal interests.
This can be a tough rule. Board members must put the NFB's interests even
ahead of their own financial interests. For example, they cannot vote for
something that would hurt the NFB, even if that means they will lose money.

Board members must also disclose any conflicts of interest. For example, if
the board is considering a contract with an entity that a board member works
for, the board member must disclose that relationship. This rule may even
require that they not participate in any decisions in which they have a
conflict of interest.

The duty of loyalty also means that NFB board members cannot be members of
competing groups. This rule can apply to many organizations. But the most
common situation involves the ACB. NFB board members cannot be members of
the ACB.

An NFB board member would violate the duty of loyalty by being a member of
the ACB because the NFB and ACB often take different positions on issues,
compete for the same membership, and compete for many of the same funding
sources. Board members have access to confidential information. Even
accidental disclosure of confidential information to a competing entity
could hurt the NFB. The duty of loyalty is one of the most important of the
Fiduciary duties. Violating it can do serious harm to the organization and
its reputation.

Duty of Compliance:

The duty of compliance requires board members to be faithful to the NFB's
purpose and mission. They must also comply with the NFB's governing
documents, such as the constitution and the code of conduct. They must also
comply with all laws and regulations that govern the NFB's operations.

In particular, NFB board members must comply with state and federal annual
financial filing rules and fundraising rules. Failing to operate legally
could cause the NFB-O to lose its non-profit status.

Duty to Manage Accounts:

The duty to manage accounts means that board members must ensure the NFB's
fiscal stability and accountability. They must make fiscally sound
decisions. NFB boards must establish policies to account properly for how
the organization spends money. For example, NFB treasurers are required to
produce written reports that are saved. This rule also requires secretaries
to document organization decisions with written minutes of meetings.

Violating the duty to maintain accounts could cause the NFB-O to lose its
non-profit status. Violating this rule could also erode the trust of donors.

Consequences of Violating a Fiduciary Duty:

Board members who violate a fiduciary duty likely will no longer be trusted
by membership to serve on an NFB board. Board members who violate fiduciary
duties can also be held civilly financially liable for their breaches. In
extreme cases of willful or intentional violations, they could even be
criminally prosecuted.

NFB board membership is certainly an honor. But being elected also brings
with it a host of legal obligations that board members must be prepared to
comply with. Not complying with these duties can have serious consequences
for both board members and the organization.

National Federation of the Blind of Ohio (NFBO)

Suzanne Turner, Ohio Affiliate Vice President

Cleveland Chapter, President

(216) 990-6199

Please click on the links below to learn more about the organization

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