DUTIES AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS

1. DUTIES AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS Presented to the School Nutrition Association by Peter R. Spanos Barnes & Thornburg LLP

2. Role of the Board of Directors • The Board of Directors is the governing body responsible for all actions of the association • The Board’s primary role is to create policy

3. How the Board Acts • Always by vote • At a duly called meeting • Where a quorum is present • Can act by unanimous written consent

4. Committees, Staff and Members • Have the powers and duties delegated to them by the Board of Directors • Day to day management of the association is delegated to the Chief Executive Officer • Board of Directors remains responsible and accountable

5. Fiduciary Duties of Directors • Duty of Care • Duty of Loyalty • Duty of Obedience

6. Duty of Care • Officers and directors must exercise ordinary and reasonable care, acting with honesty and good faith with the same diligence, including reasonable inquiry, as any prudent person would under similar circumstances.

7. Duty of Loyalty • Officers and directors must act solely in the best interest of the association • Undivided allegiance • Avoidance of personal interests • Avoidance of actual and apparent conflicts of interest

8. What Are Conflicts of Interest? • Divided loyalty • Personal interests • Financial benefit • Excess benefit transactions • Corporate opportunity • Incomplete disclosure

9. SNA Conflict of Interest Policy It shall be the policy of the School Nutrition Association that no member, while serving the Association in an leadership capacity, will take personal advantage of his or her leadership role by allowing a situation to exist that could be construed as a conflict of interest.

10. Duty of Obedience • Officers and directors must act in accordance with: • Association’s Articles and Bylaws • Governing documents • Policy • Federal, state and local laws and regulations

11. Other Guidelines • May rely in good faith on expert advice • Cannot remain ignorant • Personal liability for intentional harm • Must preserve confidentiality of information • Responsible for the actions of other directors

12. Apparent Authority • An association can be held liable for the actions of its officers, directors and other volunteers, even for unknown or disapproved actions, if outsiders reasonably believe that the association approved the actions. • American Society of Mechanical Engineers v. Hydrolevel, U.S. Supreme Court, 1982

13. How do I avoid liability and protect SNA? Let’s discuss some guidelines.

14. Formal Protections • Directors and officers liability insurance • Indemnification under the Articles and Bylaws • Volunteer protection laws • But the best “defense” is a well-developed sense of what is the “right” way to act and a working knowledge of responsibilities of leadership.

15. For example… • Be thoroughly prepared before reaching decisions • Be actively involved in discussions • Make decisions without haste or pressure • Insist that minutes of meetings and vote counts are accurate • Attend all meetings • Maintain confidentiality • Carefully review financial reports and ask questions • Read association publications and news • Avoid any conflict of interest • Ask for legal advice on legal matters • Ask for accounting advice on financial matters

16. Guidelines for communications … • Respect confidentiality and security • Think about the consequences • Avoid personal attacks, fights and hostility • Obey the law • Be respectful of privacy • Know the facts • Have another officer review before sending

17. Questions? Thanks for your participation!