Home > Tell the People > Archives > 2008 > November > 17 > Entry
Community Blog: Board of Directors, Are You Protected ?
The Downtown Waco Inc saga has made me focus on the financial literacy of non-profit organizations. Many non-profit boards recognize their responsibilities of financial oversight and organization duties of care, loyalty, and obedience. However, without a structured training program of understanding their legal duties and responsibilities, some boards become acutely unaware of their statutory liabilities, breach of duties, and third party claims that can arise from operating outside the Texas Non-profit Corporation Act.
For these reasons it is imperative that non-profits purchase Directors and Officers Liability Insurance. Does your organization have insurance? As a board of director do you have a copy? Or do not rely on management to “have it”. Remember, management works for you. With or without it, especially without it, you could be held personally liable for any breaches of duty. As a director, you could find your personal assets at stake in a claim. For this reason alone, directors and officers should exercise utmost care in avoiding conflicts of interest, financial mismanagement, improper business practices, and act in a manner that they reasonably believe is in the best interest of the organization. Any perceived breach of these duties can result in a suit. And who can bring suit? Anyone! Donors, employees, members, the general public, third parties, clients, governmental agencies.
Non profit organizations and board members have been left to pay for breaches of duty, harassment claims, and mismanagement. So it is imperative to understand your responsibility as a board member and act in the best interest of the organization. So my question is this…..Is it considered “best interest” of the organization if a director does not inquire about insurance and was not informed by management after a suit arose?
Comments
By Serious
November 17, 2008 9:37 AM | Link to this
It might be very important to talk to L.
By Curious
November 17, 2008 10:23 AM | Link to this
Thanks for staying on top of this very important subject - along with training on board insurance and liability - non-profit board members need to understand what and where to look for “indicators” - the financial reports Downtown Board Members received every month did not tell them there was corruption - the only way these board members could have seen the “indicator” is by actually looking at the check - Mills was putting the general ledger coding from the approved budget on each check and putting this information on the monthly financial reports - as long as the line item did not go over budget it was Ok - board members need to be aware of checks and balances in the organization’s financial system.
By Busybody2008
November 17, 2008 1:16 PM | Link to this
Who are exactly the board of directors for the Cen-Tex Hispanic Chamber of Commerce, Cen-Tex Community Projects Inc., and LULAC Council 274? After all, this is public record and they run non-profit organizations. Anybody know?
By funky h
November 17, 2008 8:42 PM | Link to this
The Board of Directors for both organizations are either a bunch of thieves or stupid people to allow someone to steal from others to pay for shoes, trips, etc. These people aren’t fooling anyone, I am just amazed it hasn’t caught up with them yet. Yes, I am talking about Alice and Groper Joe.
By Confused about non-profis
November 19, 2008 1:54 PM | Link to this
I’ve never seen nothing like these organizations. You call LULAC and they won’t tell you who their directors are. You call the Hispanic Chamber and they tell you it is on their website. You ask them about Community Projects Inc. and they won’t tell you. They constantly ask you why you need the information. They monitor all incoming phone calls for the numbers. They refuse to answer any other questions. They act suspicious about everything. And they keep their front door locked so you can’t even enter freely. LULAC doesn’t even appear to have members anymore, I guess. What are they hiding? Ask these questions for yourself. The phone number is 754-7111 for the Chamber and 235-8664 for LULAC. Thank goodness the Greater Waco Chamber of Commerce and other LULAC Chapters don’t do business this way. But why just them? Talk about suspicious activity. And their boards do absoulutely nothing to change this perception.
By If it looks like a duck
November 20, 2008 10:57 AM | Link to this
About the Hispanic Chamber of Commerce - let me lay it out and please correct me if I am wrong - The Chamber has a ED that groped a board member and was taken to court - The board has members that are related to the ED and did not act in a appropriate way for a non-profit and terminate the ED - while in court there were check copies that were disclosed where there were unauthorized expenses - The City awards tax monies to the Chamber - they know about the questionable expenditures and the groping - but do not act because the City Council has a member who is related to the Chamber Ed and the City Manager answers to the Council. So if the board who oversees the Chamber does not do the right thing and the City who keeps awarding tax monies (approved by the Council) does not do the right thing - who is left? This sounds like a Downtown Waco Part Two story - I guess the community has to wait for at least half of million dollars to come up missing for the city… anybody to do the right thing.
By Wind of Change
November 21, 2008 12:11 AM | Link to this
It took eighteen years for Downtown Waco Inc to figure out they had a thief. How long is it going to take the Hispanic community to wake up and start asking questions about these “secret” activities of these organizations and city hall? ‘Cause lord knows the board is in denial or too pendeho to ask for an outside audit. Audit that other non-profit too. Just another group of Groper Joe’s puppets, I guess.