As Spring draws nigh (with Daylight Saving Time imminently coming into effect), I hope you remain safe and well. Thanks for checking my blog posts.
FYI/FYA… Governance Solutions hosted a webinar today: 360o Governance – The Way Forward? Click here to listen to this and other recorded events. This session had the co-authors (Peter Dey, Sarah Kaplan) of the recent report, 360o Governance: Where are the Directors in a World of Crisis, from UT’s Rotman School of Management. Also, check out Sarah’s book, The 360o Corporation: From Stakeholder Trade-offs to Transformation.
Another resource from UT’s Rotman School of Management is the NFP Governance Essentials certificate program co-sponsored by the Institute of Corporate Directors (ICD). This intensive program is focused on governance of Not-For-Profit organizations in Canada, e.g., registered charities such as many churches across Canada. Note that we need to discern the NFP sector (registered charities and non-profits) from the for profit sector. For example, there is a separation of responsibilities and duties between the board that governs (e.g., the “ends”) and the management team that executes (e.g., the “means”). Specifically, in some jurisdictions (e.g., Ontario), there are regulatory requirements for charitable fiduciaries to discharge their duties accordingly. In particular, directors/trustees are to avoid conflict-of-interest situations, even the appearance of COI (duty 4), and also to act gratuitously (duty 5).
For example, pursuant to the guidance of the Office of the Public Guardian and Trustee (OPG&T) of Ontario’s Ministry of the Attorney General, regarding the duty to act gratuitously, a charity cannot pay a director/trustee in any capacity unless approved in advance under section 13 of the Charities Accounting Act, although the charity can reimburse them for reasonable expenses. Thus in some jurisdictions, a paid staff member cannot sit ON the governance board, although they may sit IN the board meetings by invitation.
Moreover, at the federal level, under Canada’s Income Tax Act:
- A registered charity cannot confer on a person an undue benefit.
- A registered charity that confers on a person an undue benefit is liable to a penalty, and could result in the suspension of its tax-receipting privileges.
- A registered charity that contravenes or continues to contravene the Act could also have its registration revoked.
Whereas some church constitutions and bylaws may permit their paid executive staff to serve on their board (e.g., elders), and even act as the chair, these ecclesiastical statutes do not override the provincial and federal legislations of our home and native land.