Strategic Planning Is A Governance Matter
One of the most important responsibilities of corporate leaders is strategic business planning. Strategy planning is the forward- looking exercise that defines where a business is going and how it plans to arrive. This is a governance issue as a matter of reasonableness. Church directors and officers have a fiduciary duty of care in their capacities. This duty is measured by the reasonable person standard. Courts look to what a reasonable person would do under…
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Ministry Agreements Help Church Management
Organizations often find it productive to divide their businesses into various departments. Departments often include functional areas such as accounting, human resources, and data processing. These divisions may act like mini businesses within the corporation. Most churches have ministries that are charged with carrying out specific functions. Some ministries provide services to the community. Others focus on addressing the needs of the congregation. In both instances, the ministries operate as divisions within the church structure….
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Church Officers Can Lose Liability Protections
Individuals who serve in an official capacity for an organization risk personal liability for their actions. Civil liability includes monetary damages in a lawsuit where one party alleges the actions of the officer harmed them. Corporate officers often purchase liability insurance and enact policies that provide for indemnification from civil liability. As a matter of law, church directors and officers are ordinarily immune individually from civil liability for official church actions. This is a public policy position taken in North Carolina…
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How To Prepare Effective Minutes
Keeping effective records of all official meetings is an important job for the governing board of a church. Minutes memorialize actions for historical purposes. Minutes help inform future boards of the rationale for past policy choices. A written record can help demonstrate the board’s diligence to its fiduciary duties. The minutes-keeping role is usually delegated to the elected Secretary. In some instances, a staff person is appointed assistant secretary to attend meetings and record the minutes. However,…
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A Church Must Notify Of Security Breach
It has become common to hear about security or data breaches at large companies. Some breaches arise from ransomware attacks where information is held hostage in lieu of a payment of money. In other cases, the data is leaked to the public risking identify theft of the customers. Every organization is at risk. Church leaders should consider what risks the ministry faces when it comes to security breaches. To a hacker, a church may be…
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Small Print Can Lead To Big Problems
Most contracts come with small print. This is the language that includes the underlying terms of the deal. Don’t be misled by the size of the font. Small prints in contracts can make a big difference. Some parties dismiss the importance of some contract terms. There are several misconceptions that cause one to treat some clauses less seriously. Some believe the small print is a necessary formality in legal agreements and therefore should be accepted as…
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How Church Directors Get In Trouble
Church directors have a fiduciary duty to make decisions that are in the best interests of the church. These duties include a duty of care, duty of loyalty and duty of obedience. These responsibilities are the same for any board of directors. No matter the organization, industry or charter, directors must keep a primary focus on the institution’s interests. Board members must act prudently to fulfill their obligations. Courts weigh a director’s conduct by comparing his/her actions…
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Emeritus Directors Can Improve Governance
Church leadership is responsible for making wise decisions. In many instances, the best decisions are the choices that take into consideration the history of the church. When long-serving church directors decide to step down from the board, the vacancy could leave a void in historical leadership. Church officials who have seen the ministry through its challenges over a course of time bring valuable experience. The church should consider finding a way to tap this source of knowledge for future…
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When To Call Your Attorney
The business of running a church includes managing its risks and seizing available opportunities. It is crucial to recognize, every choice church leaders make includes potential consequences. In each instance, it is advisable for church leaders to seek knowledgeable counsel before making big decisions. It is important to consider the potential outcomes of a transaction before entering into a business arrangement. Here are some scenarios when church leaders should consult with their lawyers before getting too far…
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Church Growth A Governance Issue
Church leaders have a fiduciary responsibility to make decisions that reflect the best interest of their ministry. This commitment is called the Duty of Care. The Duty of Care is a legal directive that corporate managers act in a reasonable manner. What a court considers reasonable depends on how they believe others would act under similar circumstances. The Reasonableness Test is not limited to business leaders only. A court may hold church leaders to the…
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