Nonprofits corporations are required to have a registered agent in their state of domicile and in each state where they are registered to do business. The purpose of a registered agent is to ensure that there is a place with a street address (as opposed to a P.O. Box) where an organization can be contacted or served with notice of a lawsuit or other legal action.
At times, issues will give rise to spirited debate among Board Members who each possess valuable yet different skill sets and different points of view. The Chair should make efforts to mediate differing opinions and encourage consensus on actions or policies that represent the best aspects of all points of view.
Rubber stamp boards tend to take a hands off approach to their duties and simply approve everything put in front of them by management without actively participating in deliberation and debate. This approach is dangerous for the nonprofit and the directors.
The micro-managing board members show up to their first board meeting and before they have done anything of substance for the organization, they want to revamp the reports, review the nonprofit’s journal entries, question every expense, and critique the Chief Executive’s management style. One might rightly ask whether these activities are adding value. I would argue that nine times out of ten they are not.
HB 2592, which becomes effective on August 6, 2016 (Effective Date), amends A.R.S. §10-3708 to allow the delivery of member ballots through an electronic voting system. It is important to understand this change does not apply to director votes which do not have a written ballot option.
If I could point to the one decision my clients almost always end up regretting, it’s the decision to enter into a comprehensive management contract. Some management companies prey on nonprofits, taking control over the nonprofit’s operations and charging unreasonable fees for services of questionable value.
The group of individuals charged with the governance of nonprofits are often referred to interchangeably as directors or trustees. These terms are similar in that they both refer to the group of individuals who have a fiduciary duty to oversee the nonprofit organization. However, from a legal perspective, there are important distinctions.