BOD-PRIVATE | Jan 11, 2019
Your Legal Responsibilities

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Director and Officer Duties
“Fiduciary duty”…encompasses the following four main legal principles:

  1. The duty to act in the best interests of the organization.
  2. The duty to disclose other interests and avoid conflicts.
  3. The duty to maintain the organization’s information in confidence.
  4. The duty to respect corporate opportunities.

Other Legal Issues
Apparent authority.
The U.S. Supreme Court has held a trade association responsible for the illegal activities of its volunteers where the volunteer only “appeared” to be acting with the authority of the organization. Nonprofits must limit who, among its directors and officers, is authorized to act or speak for the organization.

Antitrust liability.
Many types of nonprofit organizations policies and programs can lead to serious legal liability if the tend to inhibit competition. Antitrust violations fall into two basic categories: actions that are unlawful without regard to their actual impact on competition…and actions that are not necessarily unlawful by may be so depending on their actual impact on competitive conditions…

Avoiding Legal Liability
First, and perhaps most essential, is a top-down commitment by the organization’s directors and officers to operate fully within the law.

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