[SML] Organization of Board & Head Positions

[Stephen Rees]

First, I am not an attorney so much of what I have to say here may be
apocryphal at best. However, I have served on several 501c3 NFP boards and
at the moment have been asked to serve on another one while creating a set
of by-laws for a second operation.

I don't know if your state has a requirement for statutory compliance, but
New York State certainly does. One of the clauses that has become more
prevalent since a ruling in 2013 is the inclusion of a Conflict of Interest
Policy in any new bylaws and by amendment in the existing ones of
organizations.  I will not burden you with the some nine pages of
boilerplate laying this all out, but I can speak briefly about the concept
of Related Parties and Related Party Transactions.

A Related Party is any Trustee, Officer, Employee or any Relative of any
Trustee, Officer or Employee or any entity in which any of these
individuals has a 35% or greater ownership of beneficial interest; or in
the case of a partnership or professional corporation, a direct or indirect
ownership interest in excess of five percent (5%).
A Related Party Transaction is any transaction, agreement or arrangement in
which a Related Party has a financial interest and in which the
organization is a participant. The assessment of any Related Party
Transaction must be considered in strict compliance with the adopted
policies and procedures of the organization.
Concerning Restrictions, with respect to any Related Party Transaction, or
any other conflicted matter, considered by the Board, or an authorized
committee, no Related Party shall:
a. be present at, or participate in, any deliberations;
b. attempt to influence deliberations; and/or
c. cast a vote on the matter.

That said, None of the other words I've ever served on ever had a single
person (or persons) wearing the hat of a salaried employee while serving as
a member of the BoD simultaneously.  I think that represents a clear
conflict of interest.

I do think you need an actual attorney familiar with such matter to advise
you, but your situation is untenable.
Steve Rees





Stephen E. Rees
RAC Addition Project Shepherd
State University of New York at Fredonia
716.673.3208 Office
716.680.1565 Mobile


On Tue, Sep 22, 2015 at 6:56 PM, Troy Nary via Stagecraft <
stagecraft at theatrical.net> wrote:

> Hi all,
>
> I have a question for others in the US dealing with Non-profits. This is
> specifically about a Renaissance Faire, which, for anyone out there that
> has ever been to one will know, it is just one big stage. So I figured you
> all were the best to answer this.
>
> Until last week, I was in charge of Set Up (Stages/Walls/Everything) for
> this Faire that is a non-profit, 501(c)(3) here in Washington. I was
> summarily fired by the President of the Board, after the Board President
> got into a FB fight with my wife (who also until recently was part of the
> Faire). Yes you read that right, I was fired because of an argument I
> wasn't even involved in.
>
> I live in an At-Will state, so she didn't NEED a reason to fire me, but
> she used her position and that argument as her reason. Actually, she
> threatened my job if my wife didn't kowtow to her, and when she didn't,
> well, I am now happily looking for other things to do next August.
>
> Now my question is this:
> Do any of the Board of Directors you work with hold the Top 3 *PAYING *Department
> Jobs for the theater/event.
>
> In this case:
> President is also the Artistic Director
> VP is also the Operations Manager (Deals with all the Bills)
> Secretary is also the Site Director (Head Carpenter/Stage Manager)
>
> Now I have worked with a lot of Board operated theaters, but I have never
> run into this. Any time we ever had a Board member take a paycheck, they
> excused themselves from voting on potential jobs they would like to
> undertake and/or until the job was finished. But these are the ONLY 3 board
> members, so they set not only *their *pay, but also all other aspects of
> the Faire. To me, this seems to be a conflict of interests.
>
> Oh, and the argument started when the Board President posted something ON
> HER PERSONAL FB PAGE, and my wife basically called her a hypocrite, as she
> had just been doing the very action she was telling others to stop doing.
>
> Thoughts?
>
> Thanks-
> -Troy Nary
> LD/Stage Hand/Set builder/Spot op and general stage everything at large
>
>
> --
> "Canada is like a nice family living above a biker bar" - Robin Williams
>
>
>
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