The Board and Risk Management
Along with roles and responsibilities of boards come risks and liabilities. Whether an organization is being governed by a hands-on administrative board or a policy-driven board, board members need to be aware of the legal duties that come with their positions. Directors of non-profit incorporated boards are not usually paid for their work, but that doesn't absolve them from being liable for the decisions and actions they make.
Some of the items covered in previous sections, such as having clear job descriptions, may help board members stay informed of their responsibilities, but the onus is on the individual to be knowledgeable about risk management. Many volunteers mistakenly believe that if the organization is incorporated they are automatically protected from liabilities, but that is not the case. The governing laws of incorporation do go a long way in protecting boards and board members, but there are duties that fall to the individual.
The language and terms used in risk management and liability policies can be confusing and often mired in ‘legalese’. It is therefore recommended that individuals seek out advice, and possibly counsel, if they are unsure of their personal liabilities or the liabilities of the organization as a whole. Volunteer Lawyers Service (www.volunteerlawyers.org/about) was launched in 1994 through the efforts of Toronto lawyer Ronald Manes in cooperation with agencies such as the United Way of Greater Toronto, the Ontario Bar Association and many other supporters and contributors. Over 600 volunteer lawyers provide legal services to more than 700 Ontario community agencies, specializing in areas of business law important to non-profit and charitable organizations.
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