Recently, I spoke to a group of board members from not for profit and for profit companies about the legal responsibilities that come with board membership. I focus on three topics: (a) fiduciary dut; (b) confidentiality; and (c) antitrust. My presentation are below. Let me know if you have any questions.
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The Legal Side of Board Membership
1. The legal side of board membership
Shawn J. Roberts
www.shawnjroberts.com
2. Role of the Board
The board of directors is the:
3. Role of the Board
The board of directors is the:
4. Role of the Board
The board of directors is the:
•governing body of the association,
5. Role of the Board
The board of directors is the:
•governing body of the association,
•responsible for the ultimate direction of the
management of the affairs of the organization.
6. Role of the Board
The board of directors is the:
•governing body of the association,
•responsible for the ultimate direction of the
management of the affairs of the organization.
•responsible for policymaking,
7. Role of the Board
The board of directors is the:
•governing body of the association,
•responsible for the ultimate direction of the
management of the affairs of the organization.
•responsible for policymaking,
•Employees are responsible for executing day-to-
day management to implement board-made policy.
8. Role of the Board
The board of directors is the:
•governing body of the association,
•responsible for the ultimate direction of the
management of the affairs of the organization.
•responsible for policymaking,
•Employees are responsible for executing day-to-
day management to implement board-made policy.
•The ultimate legal responsibility for the actions (and
inactions) of the association rests with the board.
11. Fiduciary Duty:
the legal duty (responsibility) to act
in the best interests of another individual
www.turningpointlaw.ca/Glossary.htm
12. Fiduciary Duty:
the legal duty (responsibility) to act
in the best interests of another individual
individual includes
persons, companies, organizations
and charities
www.turningpointlaw.ca/Glossary.htm
14. A fiduciary duty is . . .
one of complete trust and utmost good
faith.
15. A fiduciary duty is . . .
one of complete trust and utmost good
faith.
a legal requirement of loyalty and care that
applies to any person or organization that
has a fiduciary relationship with another
person or organization.
16. In this case, its to the . . .
organization you represent and
the members
19. The duty of loyalty requires
Duty of that fiduciaries act solely in
the interest of their clients,
rather than in their own
Loyalty interest.
Must not derive any direct or
indirect profit from their
position, and must avoid
potential conflicts of interest.
20. The duty of care
Duty of requires that fiduciaries
perform their functions
with a high level of
Care competence and
thoroughness, in
accordance with
industry standards.
21. Duty of Obedience
Refers to the board member’s obligation to
advance the mission of the organization
and also an expectation that board
members will act in a manner that is
consistent with the mission and goals of
the organization.
Failure of this duty can result in a loss of
public confidence in the institution.
22. Duty of Obedience
Refers to the board member’s obligation to
advance the mission ofthisorganization
Failure of the duty can
and also an expectationloss board
result in a that of public
members will act in a manner that is
confidence and the of
consistent with the mission
in goals
the organization. institution.
Failure of this duty can result in a loss of
public confidence in the institution.
25. Suggestions for reducing Risks
Being thoroughly and completely prepared before
making decisions.
26. Suggestions for reducing Risks
Being thoroughly and completely prepared before
making decisions.
Being actively involved in board meetings,
commenting as appropriate, and asking questions
where prudent.
27. Suggestions for reducing Risks
Being thoroughly and completely prepared before
making decisions.
Being actively involved in board meetings,
commenting as appropriate, and asking questions
where prudent.
28. Suggestions for reducing Risks
Being thoroughly and completely prepared before
making decisions.
Being actively involved in board meetings,
commenting as appropriate, and asking questions
where prudent.
Making decisions deliberately and without undue
haste or pressure.
29. Suggestions for reducing Risks
Being thoroughly and completely prepared before
making decisions.
Being actively involved in board meetings,
commenting as appropriate, and asking questions
where prudent.
Making decisions deliberately and without undue
haste or pressure.
Insisting that meeting minutes accurately reflect
the vote counts (including dissenting votes and
abstentions) on actions taken at meetings.
36. Confidentiality
All board discussions are
confidential
Allows a free and open
discussion
If you are contacted about
board matters, refer to
CEO or President
37. Antitrust
The antitrust laws proscribe unlawful mergers
and business practices in general terms, leaving
courts to decide which ones are illegal based on
the facts of each case.
38.
39.
40. Any business or marketing plan that’s
principal goal is to adversely affect a
competitor could be considered a
violation of antitrust law.
Jodi Tuttle, “What You Don’t Know About Antitrust Can Ruin You,” Indiana
REALTOR®, May 2001
41. Anti-trustish activities
• Price Fixing
•Division Of Markets
•Group Boycotts
An Antitrust Primer for Realtors®, By Henry A. Hart, Esq.
http://nvar.com/index.php/law-ethics/article/an_antitrust_primer_for_realtors
Editor's Notes
My goals for this presentation is to provide an overview of the legal issues that impact board members;\n\n1. Fiduciary Duty as a board member\n2. Anti-trust\n3. confidentiality obligations\n
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One of the most powerful traits the Board has is its credibility with the people it serves; violations of the fundamental duties of a board member have not only legal but practical consequences\n
I am going to talk about three things:\n\n1. Legal duties of board members;\n2. overview of anti-trust\n3. confidentiality of what you do with the board\n
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The Board can wrestle with issues in its meetings but once a decision is made, the Board and organization speak with ONE voice, that of the president\n
The Board can wrestle with issues in its meetings but once a decision is made, the Board and organization speak with ONE voice, that of the president\n
The Board can wrestle with issues in its meetings but once a decision is made, the Board and organization speak with ONE voice, that of the president\n
The Board can wrestle with issues in its meetings but once a decision is made, the Board and organization speak with ONE voice, that of the president\n
The Board can wrestle with issues in its meetings but once a decision is made, the Board and organization speak with ONE voice, that of the president\n
The Board can wrestle with issues in its meetings but once a decision is made, the Board and organization speak with ONE voice, that of the president\n
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Price Fixing  - (e.g., an agreement among competing real estate firms to charge the same commissions or to increase their commissions, or an agreement among REALTORS® to use a form listing agreement which includes a set commission rate). \nDivision Of Markets - An agreement among competing real estate firms to allocate customers (e.g., each firm agrees not to solicit the other firm's customers).\n\nGroup Boycotts  - An Association of REALTORS® denies to a competing real estate agent or broker, without any reasonable basis, competitive advantages which are derived from membership in the Association, (e.g., denying access to a multiple listing service to a competing real estate agent or broker because a director of the Association has a personal grudge against such agent or broker).\n