The directors of a not-for-profit corporation are bound by two general types of legal duties:
A duty of care
The duty to perform their responsibilities in good faith, in a manner reasonably believed to be in the best interest of the corporation, and with such care as an ordinarily prudent person would be in similar circumstances; and
A duty of loyalty
The duty to keep the interests of the corporation paramount above personal interests when acting for or on behalf of the corporation.
The following Ten Commandments provide examples of some of the actions a board of directors should take to act in accordance with its legal duties.
1) Hold Regular Meetings
2) Ensure that the corporation holds an annual meeting
3) Keep the minutes of the board and committee meetings
4) Ensure that all government filings are made on time
5) Ensure that employment-related taxes are paid on time
6) Adopt and follow a conflict of interest policy
7) Approve and manage an annual budget
8) Approve the salary budget
9) Review the audit
10) Approve all bank accounts and all loans
Download the Foley Hoag Ten Commandments for Not-For-Profit Board of Directories eBook (.pdf)