copyright 2012© protecting members of the board an ounce of prevention is worth a ton of cure!
TRANSCRIPT
STEWARDSHIP GOD’S WAY
Copyright 2012©
Protecting Members of the Board
An Ounce of Prevention is Worth a Ton of Cure!
What are the Allegations?
• Decision-making errors• Handling Finances incorrectly• Conflict of Interest: Awarding Contracts• Employment Compensation• Hiring/Firing Decisions and Process• Employee Tax Withholding• Breaks from the Denomination• Sexual Misconduct• 15 Passenger Van Use
STEWARDSHIP GOD’S WAY BETTER 2012 FINANCES
Consequences of Allegations
• Suing for Money! And Lots of it!• Board Members Personally Sued• Board Members have immunity under Federal
Law• Lengthy and Expensive Process to Prove they
Deserve Immunity• Personal loss of Reputation
STEWARDSHIP GOD’S WAY BETTER 2012 FINANCES
What Can be Done to Minimize Risk?
• Be Proactive!• Have a Written Job Description– Qualifications– Reporting and Supervisory Responsibilities– Duties and Expectations– Term of Service– Meeting Attendance Requirements
STEWARDSHIP GOD’S WAY BETTER 2012 FINANCES
Training and Orientation
• Copies of Church Charter/Articles of Incorporation– Bylaws and Governing Documents
• Church Policies and Procedures• Discuss how Decisions are Made• Financial Statements
STEWARDSHIP GOD’S WAY BETTER 2012 FINANCES
Training and Orientation
• Previous Meeting Minutes• Minutes from other Committees that may
Affect Board• Training Materials www.nonprofitrisk.org• www.christianleadershipalliance.com• Explain their Fiduciary Responsibility: Prudent
Man Act• Dealing with Conflicts of Interest
STEWARDSHIP GOD’S WAY BETTER 2012 FINANCES
Steps to Deal with Conflict of Interest• The Transaction is Fully Disclosed in the Church’s
Audited Financial Statements;• The Board Member is Excluded from the
Discussion and Approval of the Transaction;• A Competitive Bid or Comparable Valuation is
Obtained; and• The Church Board has Demonstrated that the
Transaction is in the Best Interest of the Church• Evangelical Council of Financial Accountability (ECFA)
STEWARDSHIP GOD’S WAY BETTER 2012 FINANCES
What Can be Done to Minimize Risk?
• Have a Written Policy and Procedure• Include an Indemnification Clause: Hold
Harmless Agreement• Directors and Officers Liability Insurance• Be Consistent • Transition Process for New Board Members• Staggered Terms of Service
STEWARDSHIP GOD’S WAY BETTER 2012 FINANCES
Policy and Procedure
• For a FREE copy of a policy and procedure regarding board members, contact David Rutledge at [email protected]
STEWARDSHIP GOD’S WAY BETTER 2012 FINANCES
What Questions do you have for me?
559 287-7840 cell 559 256-0858 direct line
STEWARDSHIP GOD’S WAY BETTER 2012 FINANCES