When the attorney general calls your office and asks about a board decision, could you find your minutes quickly?
You, gentle reader, may think this will never happen to you. You may not even have imagined that it could happen to you. But members of nonprofit boards are beholden to the state in which they are incorporated. As a director or officer, you have a duty to ensure that your organization conducts its affairs properly. The record of those affairs is – the meeting minutes, approved by the board, signed by the secretary, and properly kept.
Recently we’ve encountered several instances in which the minutes reside only on the computer of the secretary. With the usual turnover in volunteer board offices, this means that only one or two years’ worth of minutes are easily accessible. There is no “board book” or official file. Should any question arise, it would be a painstaking and time-consuming labor (a) to locate the minutes of the meeting in question, and (b) to verify that those minutes are indeed the official record, since only a draft form is available.
The news is filled with accounts of theft and embezzlement by trusted members of nonprofit organizations. I’ve encountered several such instances myself in the bodies I’ve belonged to. It is common, it is scandalous, and it often occurs because the board just isn’t paying attention.
Study your financial reports, make sure your secretary knows how to take and keep good minutes, and protect yourself from that call from the AG and all the subsequent damage that could ensue.
Ann G. Macfarlane PRP
© Jurassic Parliament 2014. All rights reserved.
PS. It is often easy to determine the requirements for your state of incorporation on the web. Read the Washington state law here.