1. 1
How to participate in the call:
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2. 2
Best Practices for Using a Telephone for Webinar
• Find a quiet location for your call
• Use a corded phone if possible
• Do not place your phone on “speaker” setting
• Direct your voice toward the phone for best reception
• Keep your phone on mute when you are not speaking
3. 3
Asking Questions
• If you have a question please type it into the Chat box.
• We will pause at the end of each of the three sections to
answer questions.
4. 4
REMINDER:
All attendees will receive a link to the
slides and a recording of today’s
session via email within 48 hours.
The PowerPoint will also be posted on
the My Rotary Board Portal in the
Orientation 2018-19 folder.
5. RI DIRECTOR-ELECT ORIENTATION 2018-19ubject
Organizer/Presenter: RI Vice-President John Matthews
Date: 6 November 2018
7. | 7
Office of the General Counsel
• General Legal Responsibilities
– Legal Compliance, Litigation, Contracts
• Corporate Governance
• Council on Legislation/Council on
Resolutions
• Stewardship
• Trademark Protection, Licensing
• Other
8. | 8
Rotary International
• Not for Profit Corporation, incorporated in
the State of Illinois in 1911.
• Tax exempt under US Tax Code Section
501(c)4 - “social welfare” organization.
• No income taxes on dues revenue, or
investment and rental income.
9. | 9
The Rotary Foundation
• Not for Profit Corporation, incorporate in
the State of Illinois in 1983
• Tax exempt under US Tax Code 501(c)(3) as
a public charity.
• Can receive income tax deductible charitable
contributions.
• Must be operated for charitable or
educational purposes.
10. | 1 0
Section 501(c)(3) vs. Section 501(c)(4)
• RI = Section 501(c)(4) Social Welfare Org.
• TRF = 501(c)(3) Public Charity
• Both are Income Tax Exempt
• Public Charities
– Contributions are tax deductible in U.S.
– Vendors give preferential rates
– Expanded partnership/sponsorship opportunities
• RI may convert to Section 501(c)(3)
11. | 1 1
Fiduciary Duties
What are the Board’s
Fiduciary Duties?
12. | 1 2
Fiduciary Duties
Definition of Fiduciary Duty
A fiduciary is one who is entrusted with
accountability for an organization’s well-being.
A fiduciary duty is the heightened legal
obligation placed upon a fiduciary.
13. | 1 3
Fiduciary Duties
Three “Duties”
• Duty of Care
• Duty of Loyalty
• Duty of Obedience
14. | 1 4
Directors’ Duties
Duty of Care
A Director must discharge his or her duties:
• In good faith.
• With the care that an ordinarily
prudent person in a like position
would exercise in similar
circumstances.
• In a manner the director reasonably
believes to be in the best interests of
the organization.
15. | 1 5
Directors’ Duties
Duty of Care
• Attend Board Meetings.
• Review materials and engage in
decision-making process.
• Ask questions.
• Exercise independent judgment.
• Delegate to responsible individuals.
• Understand the organization.
• Follow up.
16. | 1 6
Directors’ Duties
Duty of Care
Prudent delegation is permissible
• Staff
• Outside Consultants (legal counsel, auditors)
• Other Board members
17. | 1 7
Directors’ Duties
Duty of Loyalty
• Conflicts of Interest (awareness and
disclosure)
–Directors submit annual conflict of
interest statement
• Confidentiality
• Serving the interests of Rotary International
as a whole, not any constituency, group or
individual.
18. | 1 8
Directors’ Duties
Duty of Loyalty
Which are you?
A representative of your zones?
– Bring your zones’ perspective to the
Board.
– Take positions that are best for Rotary.
A representative for your zones?
– Advocate for and take positions on behalf
of your zones’ interests.
19. | 1 9
Directors’ Duties
Duty of Obedience
A Director may not act beyond scope of his or
her authority.
• Laws of the United States, Illinois.
• RI Constitutional Documents.
20. | 2 0
Directors’ Duties
Duty of Obedience
What is the authority of a director to act on
behalf of Rotary International?
None. A director is only one of 19 votes!
23. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 2 3
Learning Objectives
Incoming Board members should
understand:
• The purpose of the Council on Legislation and
the Council on Resolutions
• The role of the Board at the Councils
• The preparation needed for effective
participation at the Councils
24. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 2 4
Council on Legislation
• 1933: Created and meet every year at the
Convention
• 1954: Begin meeting every two years
• 1972: Become official legislative body
• 1974: Start meeting every three years
• 1977: Start meeting independently of
Convention
• 2001: Start meeting in Chicago
• 2016: Held a separate Council on Resolutions
25. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 2 5
Council Cycle
Year one: Representatives
Year two: Proposed legislation
Year three: The Council on Legislation
(Council on Resolutions is held each year within this cycle)
27. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 2 7
What is a Resolution?
Resolutions
Requests of
the RI Board
or Trustees
Do not
change RI’s
constitutional
documents
May be
submitted
directly to the
Board as
petitions
29. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 2 9
Council on Resolutions
• Occurs annually, online
• Each district’s Council representative
participates
• Deadline for submitting resolutions is 30
June each year
• 2018 COR – 15 October – 15 November 2018
• 2018 COR has 55 resolutions
• No official debate or discussion
31. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 3 1
Council on Legislation
• Triennial meeting to review the constitutional
documents of RI
• Each district sends one voting member to the
Council
• Scheduled for 14-18 April 2019
• Held at Hyatt Regency Chicago (new location)
32. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 3 2
Legislation
• There are two types of legislation:
– Enactments: seek to change RI’s constitutional documents
• RI Constitution
• RI Bylaws
• Standard Rotary Club Constitution
– Position Statements: submitted by the Board only, do not
change RI’s constitutional documents
• Deadline was 31 December 2017
• Over 180 enactments for the 2019 COL
• 116 items have been published
33. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 3 3
Board Items
• Currently 26 items
have been proposed
by the Board
• Urgent legislation
may be proposed by
the Board through
31 December 2018
36. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 3 6
Representatives – Voting Members
• One representative
and alternate per
district
• Serve from July 2017
to June 2020
• Qualifications:
– Past district governor
– Member of a Rotary
club in the district
• In 2019, 78% of
representatives were
serving for the first
time
37. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 3 7
Non-voting Members
• Chair
• Vice chair
• Parliamentarian
• Secretary (the General
Secretary, unless another person
is appointed)
• Constitution and Bylaws
Committee
• Members-at-large (COL only)
• RI president
• President-elect
• RI Board of Directors
• General Secretary
• Rotary Foundation Trustee
(elected by the Trustees)
• Past RI presidents
38. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 3 8
Constitution and Bylaws Committee
• Serves as counsel regarding the constitutional
documents and legislative procedures
• Drafts legislation and resolutions at the Board’s
request
• 2018-19 members are:
– Raju Subramanian, India, Chair
– Adrienne Bzura, U.S.A., Vice-chair
– Tom Griffin, England, Member
– Duncan Conrad, Canada, Member
– Robert C. Knuepfer, U.S.A., Liaison Director
– Kenneth Schuppert, U.S.A., Liaison Trustee
39. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 3 9
Board Responsibilities
• Non-voting members of the COL and COR
• May propose legislation and resolutions
• Decides Board positions
• Acts as a united Board at the Council
• Submits statements of support or opposition
on enactments
• Presents Board proposals
• Speaks when authorized to do so
40. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 4 0
Board COLAdvisory Committee
• Drafts statements of support or opposition on
behalf of the Board
• Coordinates Board strategy with the RI President
• Selected items to be discussed at the Rotary
Institutes
• 2018-19 members are:
– Mark Daniel Maloney, Chair
– Robb Knuepfer, Member
– David Stovall, Member
– Brian Stoyel, Member
– Piotr Wygnanczuk, Member
41. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 4 1
Significant dates for the Councils
August-September 2018 Legislation for 2019 COL published
1 October –
15 November 2018
2018 Council on Resolutions
By 20 November 2018 COR results posted
November 2018 COL registration materials emailed to representatives
14 February 2019 Statements of Support or Opposition due to Rotary
March 2019 COL webinar (tentative)
14-18 April 2019 Council on Legislation
By 18 June 2019
COL Report of Action and updated constitutional
documents published
30 June 2019 Resolutions for 2019 COR due to Rotary
1 October –
15 November 2019
2019 Council on Resolutions
42. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 4 2
Additional Information
• Articles 7, 8, and 9 of the RI Bylaws
• The Councils page on Rotary’s website, with links to:
– How to Propose Enactments
– How to Propose Resolutions
– Online resolution certification form
– Online legislation certification form
• How to Propose Legislation and Representative Training
courses in the Learning Center
• Council on Legislation workgroup, accessed through
your profile on rotary.org
• Email: Council_services@rotary.org
43. ROTARY’S LEGISLATIVE PROCESS AND THE COUNCILS | 4 3
Privacy Update
• New privacy laws in effect (GDPR in the EU)
• Enterprise project to review compliance
– Process inventory
– Lawful basis
– Reviewed policies and notices
• Website policy
• Policy in the Code of Policies
– Records management
– Data breach procedures
44. Intellectual Property
Rotary International Director-elect Orientation
Jomarie B. Fredericks, Deputy General Counsel, Chief Intellectual Property
Counsel
6 November 2018
45. 45
19.010: “The board shall maintain and preserve an
emblem, badge, and other insignia of RI for the
exclusive use and benefit of all Rotarians.”
Art. XIX, RI bylaws (originally enacted in Art. XVI, 1922 bylaws)
Clubs gave authority to RI in the bylaws to preserve and
protect the trademarks as early as 1922.
46. 46
Types of RI Trademarks
Symbols and/or Designs
Words
48. 48
Trademark & Service Mark Registration
The Rotary Marks are registered in over 77
countries
RI’s ability to protect its rights and use of the
Rotary Marks in a particular country is largely
dependent on RI’s registered status.
49. 49
Monitoring Use of Others’ Marks
Track use of same or similar marks by others
throughout the world
Prevent loss of trademark protection by opposing
other’s use of same or similar marks
Familiar terms such as “escalator,” “zipper” and
“aspirin” were once trademarks
51. 51
Licensing System - Merchandise
The RI bylaws prohibit commercial use of the Rotary
Marks
One exception is the RI Licensing System
Commercial vendors are Licensees of RI
RI currently has approximately 146 licensed
distributors of club supplies in 31 countries
RI licenses software vendors under the Community
Marketplace and has 6 club management system
vendors and 6 online tool/app vendors
53. 53
Licensing System – Licensing Exceptions/Considerations for Rotary Clubs
Special Board considerations for Rotary clubs
include:
Event-specific exception to licensing
Rotary Entity fundraiser license
2005 - new TRF fundraising category added
54. 54
Royalties
1986-87: $577,134
2009-10: $995,861
2010-11: $991,995
2011-12: $999,424
2012-13: $955,979
2013-14: $950,157
2014-15: $944,212
2015-16: $881,143
2016-17: $873,248
2017-18: $996,653
Royalties increased
from several hundred
thousand U.S. dollars
per year to just under
US$1 million per year
Fairly constant –slight
increase for the
Centennial
55. 55
Other License Types
Regional Magazine Agreements
Approximately 33 Regional Magazines in addition to
The Rotarian
In 2005, formalized former “certification” process
Renewals will be done in 2019
5 year license to use the Rotary Marks and
circularize Rotarians
• Naming Rights Agreements
• Sponsor/Partner Agreements
• Trademark License Agreements
56. 56
19.010: “The board shall maintain and preserve an
emblem, badge, and other insignia of RI for the
exclusive use and benefit of all Rotarians.”
Art. XIX, RI bylaws (originally enacted in Art. XVI, 1922 bylaws)