So you’re a board member. . .  Now what?

Hopefully, there is a robust orientation that will help you to understand the commitments and expectations you just agree to meet.  Whether or not there is there are some common things that should help any board member.  Here are three items you should consider.

First you should know that attendance is generally required.  Usually that attendance is in person but as technology expands and improves some board allow attendance via conference call or video conference.  You should find out how many meetings and plan to attend at a minimum the majority of these meetings.  You will want to know if you can attend other than in person and if you are not in person if you may still fully participate, vote and if your vote counts.  You need to understand the time commitment so you can be certain you can fulfill that commitment.

Second you need to understand the role of your board and thus your role as a member.  Depending on the size of the organization and particularly the size of the staff of the organization, some boards are hands on in running the activities while many and perhaps most serve as the general steering committee for the overall direction of the organization.  In some boards there may be an expectation that you will serve as a good will ambassador and/or fundraiser for the organization.  However, you will want to know early on whether you are expected to manage or micromanage the organization.

Finally, in any board you must remember that you are responsible for the health, well-being and sustainability of your organization.  This is true no matter the organization whether a trade association or non-profit raising funds to fight cancer or any type of association.  The organization and you as a board member have a responsibility to see that the funds of the organization, no matter the source, are used for the express purposes of the organization.

There are numerous other items you may want to consider.  You should familiarize yourself with the policies of the organization particularly as it relates to conflicts of interest.  You will also want to know the term of your service and whether you may serve additional terms.  Finally, there may be additional board member training that is available to you through your association.  There are numerous resources available online both free and at some cost. 

 
 
So you’re a board member. . .  Now what?

Hopefully, there is a robust orientation that will help you to understand the commitments and expectations you just agree to meet.  Whether or not there is there are some common things that should help any board member.  Here are three items you should consider.

First you should know that attendance is generally required.  Usually that attendance is in person but as technology expands and improves some board allow attendance via conference call or video conference.  You should find out how many meetings and plan to attend at a minimum the majority of these meetings.  You will want to know if you can attend other than in person and if you are not in person if you may still fully participate, vote and if your vote counts.  You need to understand the time commitment so you can be certain you can fulfill that commitment.

Second you need to understand the role of your board and thus your role as a member.  Depending on the size of the organization and particularly the size of the staff of the organization, some boards are hands on in running the activities while many and perhaps most serve as the general steering committee for the overall direction of the organization.  In some boards there may be an expectation that you will serve as a good will ambassador and/or fundraiser for the organization.  However, you will want to know early on whether you are expected to manage or micromanage the organization.

Finally, in any board you must remember that you are responsible for the health, well-being and sustainability of your organization.  This is true no matter the organization whether a trade association or non-profit raising funds to fight cancer or any type of association.  The organization and you as a board member have a responsibility to see that the funds of the organization, no matter the source, are used for the express purposes of the organization.

There are numerous other items you may want to consider.  You should familiarize yourself with the policies of the organization particularly as it relates to conflicts of interest.  You will also want to know the term of your service and whether you may serve additional terms.  Finally, there may be additional board member training that is available to you through your association.  There are numerous resources available online both free and at some cost. 

 
 
Most professional license holders have no idea that failure to pay child support in Pennsylvania can result in the suspension of their professional license.  In Pennsylvania, the domestic relations act provides that the holder of a professional or occupational license may have their license suspended, non-renewed or not issued for certain actions.  See 23 Pa.C.S. §4355.  These actions include failing to pay child support to the extent that the amount due equals three months or more of the monthly support obligation and where the department has been unable to attach the income directly from the employer.  So don’t play games with child support because your license is at risk.  In addition, your license can also be affected if you have failed to comply with a visitation or partial custody order and have been held in contempt.  Your license can further be affected if you fail to comply with subpoenas and/or warrants relating to paternity or child support proceedings.  Remember a license is a privilege not a right and you must live up to the standards to maintain that privilege.

Fortunately, as a licensee, you do have certain rights and your license cannot be affected without a hearing and notice to you.  It is not in anyone’s best interest that your ability to earn a living be put in jeopardy so generally these issues can be resolved short of an actual license suspension.  Certainly complying with all court orders is a start.  Having your company begin to deduct child support directly will also help. 

The process provides that the licensee must be provided thirty days notice that his or her license will be suspended and an opportunity to contest the decision.  However, the decision can only be contested on a mistake of fact as to the amount owed or as to mistaken identity.  But it does allow for a resolution by paying the arrears, entering a payment plan, responding to the subpoena etc.

On a side note this same statute applies to motor vehicle, boating, hunting and fishing licenses.

If you have any questions please contact me.  jmcguire@c-wlaw.com

 
 
It seems like associations like most employers can’t keep up with the changing technology as it relates to social media.  This is true as it relates to the use of social media and the governance of social media in the workplace.  I'm new to social media and won't make any effort to instruct you on blogging, twitter, facebook et. al.  I’m going to discuss social media policies. There is so much variety in the use of social media that that will be reflected in the variations in social media policies.  There is no one policy that everyone should use.  The policy will reflect the attitudes and differences in the various associations.

In drafting your social media policy you will have to ask, does your organization use social media?  Is there an expectation or requirement that some of the employees will use social media during work hours?  Do you want to encourage your staff and volunteers to engage in the use of social media either as a member service or as an advertisement or for something else?  What are your goals with regard to social media and with your social media policy?  Is there confidential information which needs to be protected?  How are you addressing copyright issues?  The answers will shape what direction your association's social media policy will take.

To my knowledge the most famous Social media policy currently is that of Coca-cola http://www.thecoca-colacompany.com/socialmedia/.   Coke has a wide open policy, encourages its employees to use social media to essentially promote Coke and has made its policy available to the public.  The Coke policy sets some guidelines or expectation for the use of social media.  Coke encourages its employees to be “online spokespeople.”  Your organization may want to be more or less like Coke. 

My advice is that social media is not going away.  Employees are using social media so you need to provide some guidance on when and how they may use social media while at work and what they may communicate in official association publications and personal communications concerning.  Without talking to you I can't tell you what form your social media policy should take but I can tell you you need a policy.  If you need assistance drafting a Social Media Policy (or any other policy) for your association or business please do not hesitate to contact me.  jmcguire@c-wlaw.com

 
 
Tax Exempt Organizations need to be aware of the changes to the new 990 which was released on January 24, 2012.  Here is a link to the 2011 990 http://www.irs.gov/pub/irs-pdf/f990.pdf and the instructions http://www.irs.gov/pub/irs-pdf/i990.pdf. The first two pages of the instructions provide information about the “significant changes”. 

One very important change that all organizations must be aware of is that you can no longer say “yes” to question 11a on the 990 if the 990 form was made available upon request of the board members.  In order to answer “yes” the board will have to be provided the document.   Obviously the idea is that the board should actually review the 990 and be aware of its content before the 990 is filed.

There are changes concerning entities with foreign investment greater than $100,000, board chair compensation and compensation of officers and employees, net losses and contributions.  There are other changes that affect joint ventures, investment partnerships and hospitals as well.  The instructions now provide more guidance in areas that were lacking.  Other minor changes include instructions that an orginization must make reasonable efforts to obtain information from third parties and paid preparers must enter their PTIN but may sign with a rubber stamp, mechanical device or computer software program.  For more information and to see all the changes review the forms and instructions.

The 990 (or 990-EZ) is generally required by the IRS to be filed for tax exempt organizations.  Which form is required is generally determined by the amount of gross receipts or assets of an organization.  Please have a qualified CPA assist your organization in the completion of the return.

 
 
I’ve previously mentioned Directors and Officers Liability Insurance or D&O Insurance.  As a volunteer board member it is important that your organization maintain D&O Insurance and you should satisfy yourself that your organization carries this insurance.  D&O Insurance is different than E&O Insurance.

D&O Insurance is necessary because when claims are made against a company they are often made directly against its board of directors at the same time.  These claims are most often employment related so make certain there is employment practices coverage.  However these claims can be essentially any type of civil lawsuit including conflict of interest.  D&O Insurance is specifically designed to protect directors and officers who are sued for activities conducted within the performance of their duties on behalf of the company.  You should have this coverage for any board on which you serve.

As a board member you can insist upon D&O Insurance before you serve.  You should do so in all instances but particularly if the company has any employees, handles funds or provides services.  Some questions to ask in addition to whether there is a policy would include what the policy limit is, whether the policy is claims made and if so is tail coverage available, whether defense costs are inside or outside the policy limit and whether that are any exclusions.  Your company probably has an insurance broker or agent who can help you understand if there exists proper coverage.  Otherwise ask the company’s attorney for that information.

An alternative is to have a personal umbrella insurance policy which would provide covered protection but would cost you money.