April 14, 2024 - Board of Directors
Tag(s):
Board of Directors,
Governance
Orienting New Directors
Association governance isn’t everyone’s first choice for lively after-dinner conversation, but it’s key to keeping your association functioning well. To promote this, it’s important to orient new directors and give them the tools they need to do their jobs properly.
What New Directors Need to Know
You need to communicate information in three areas:
- What the association is and does
- What the board’s legal duties are
- How to be effective at board meetings
We’ll tackle these one at a time.
What the Association Is and Does
If your new directors are long-time members, they’ll already know some, but not all, of this. For directors who are new to the association, and for those who have never been members (some association bylaws allow this), you’ll need to cover more ground. As a minimum, you want to communicate:
- Your association’s mission statement, if you have one, or a general statement of purpose if not. This helps new directors understand why the association exists, what it hopes to accomplish, and how it fits into its larger world
- The association’s strategic or business plan. The board should be working to accomplish the goals and activities in your plan, so understanding it will help keep board members on task
- The association’s financial status. Sure, new directors who are already members will have seen the financial statements presented at your annual general meeting, but they likely haven’t looked at them from the perspective that they, as board members, are responsible for them. You should also share the most recent budget, so they know what the financial goals are for the current year
- Any committees the association has, and what each of them was set up to do
What the Board’s Legal Duties Are
This is probably the driest part of the orientation, but it’s key to fulfilling a director’s responsibilities. Here’s what they need to know:
- The association’s legal “hierarchy” – the framework in which it operates. This typically includes:
- Governing legislation – if your association is incorporated, its operation is governed by legislation – the federal Canada Not-for-profit Corporations Act or an equivalent provincial act. This sets the broad boundaries for your governance
- Governing regulations – each federal or provincial act has a set of regulations that provide further information on how associations incorporated under it must behave. Both the governing legislation and associated regulations can be found at https://www.canlii.org/en/, under “Primary Law”
- Articles of Incorporation, Articles of Association, Letters Patent, or something similar – this is the “license” to operate, issued under the authority of the governing legislation. Ideally, you should give a copy of this document, plus any amendments to it, to new directors. This typically shows the objects of the association, gives information about the voting rights of different classes of members, sets the size of the board, and lists any limitations on what it can do
- Bylaws – whether or not you’re incorporated, you almost certainly have bylaws. Walk new directors through these so they understand the rules the association has set for itself. Again, give them a copy of the bylaws
- Rules, regulations, policies and/or procedures – if you have them, share them with new directors and go through them
- Duties imposed by legislation. These usually break down to:
- The fiduciary duty – this is often worded as “the duty to act honestly and in good faith, with a view to the best interests of the corporation.” What it means is that, acting as directors, they have to satisfy themselves that everything they do is best for the association, and not necessarily for the members, a particular group of members, or themselves. As part of this, they will need to be aware that they must avoid conflicts of interest, and what they have to do if they do have a conflict
- The duty of care – in the legislation, this can be worded as “exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.” New directors may be familiar with this as “doing their due diligence”. Basically, it means the board has to check out any decision they are asked to make to ensure it’s reasonable, founded on good information, and as correct as possible. To do this, they need to carefully review any supporting documents, think critically about them, and ask questions
- The duty to comply – this isn’t necessarily found in all legislation but, where it is, it’s expressed as the duty to obey the governing legislation and its regulations, the association’s articles, its bylaws and any unanimous member agreements
How to Be Effective at Board Meetings
What should new directors expect to see and do at board meetings, and how does the board operate? Include:
- What kind of preparation they are expected to do for meetings. Assuming you pre-circulate meeting documents, when can they expect to receive them and how long would they normally need to spend reviewing them?
- If a director is assigned a portfolio (e.g., membership, program, etc.), what is involved in that? What kind of reporting do you expect them to do? Are they supported by a committee?
- How long do meetings normally last? Everyone has a life apart from the association, but they do need to allocate time for the association’s work, and that includes meetings
- How are your meetings conducted? Are they relatively informal? Have you adopted “Rules of Order” such as Roberts? How should they behave during a meeting?
Covering at least these points may take an hour or two, but it’s well worth it to prepare new directors to be effective board members, taking your association forward. For more information on this, download our free guide!
Photo: Courtesy of Pexels
