Home: Message List - Board members and business owners

Re: Board members and business owners

Excellent — Thu, 14 Feb 2008 17:07:21 GMT

What do you mean when you say, "When RFP's are put out, you should take yourself out of the contract review process?"

Re: Board members and business owners

capecoach — Thu, 14 Feb 2008 16:36:18 GMT

I can be more the appearance of a problem than a real problem. It would be great if the Board member offered his goods and services 'at cost' or for free. If not, make real sure that you are getting competitive bids before you select that Board member.

Re: Board members and business owners

Lucky7 — Sat, 17 Nov 2007 07:19:53 GMT

That's a legal question and there's a lot more to it than yes or no.

I would suggest consulting with an attorney because there are legal issues for you as a board member, the organization itself, and your company providing the product or service to the non-profit.

It can get complicated and you don't want to damage the reputations of anyone involved.

Re: Board members and business owners

Ed O'Gee — Wed, 14 Nov 2007 19:53:52 GMT

Lighthouse makes a good point. But again don't lose site that if your company can provide a product to your non profit that the non profit actually needs at a price that is competitive then where is the conflict? It is a touchy subject but I would not rule out doing business with a non profit just because I sit on the board. Again, when RFP's are put out, you should take yourself out of the contract review process.

Re: Board members and business owners

Lighthouse24 — Wed, 14 Nov 2007 18:53:06 GMT

In my board experience, the board member's for-profit company would be allowed to supply a product or service to the non-profit organization (if the board agreed that is was in the non-profit's best interest) -- but the for-profit company would have to supply that product or service at actual/verifiable cost (i.e., the company/owner could not profit from it).

If we think that something MIGHT be an ethical issue, it's almost a sure bet that at least a few other people will conclude that it IS an ethical issue (and at least one of them will contact the media about it).

Re: Board members and business owners

Excellent — Wed, 14 Nov 2007 16:11:42 GMT

In reference to the quote, "No individual board member shall profit from the organization," does that mean that if someone is on the board of directors for a non-profit agency and that same person owns a for profit business that this person can not do business with the non-profit agency for whose board this person sits on?

Re: Board members and business owners

Lighthouse24 — Tue, 13 Nov 2007 21:57:45 GMT

EVERY non-profit I have been involved with has this statement in it's Code of Ethics or Code of Conduct for board members: "No individual board member shall profit from the organization." If it is in the best interest of the organization, a member may supply a product or service to the organization at his/her actual (auditable/verifiable) cost, but not at a profit. (Some previous posts obviously reflect a different viewpoint and experience, so ultimately it's the specific organization and individual who have to decide what's right.)

Re: Board members and business owners

LUCKIEST — Tue, 13 Nov 2007 21:54:36 GMT

Try this one, Maybe this answers your question

Directors must act honestly and in bona fide. The test is a subjective one—the directors must act in "http://en.wikipedia.org/wiki/Good_faith in what they consider is in the interests of the company...
However, the directors may still be held to have failed in this duty
where they fail to direct their minds to the question of whether in
fact a transaction was in the best interests of the company.

In relation to a http://en.wikipedia.org/wiki/Company_%28law%29, a director
is an officer (that is, someone who works for the company) charged with
the conduct and management of its affairs. A director may be an inside
director or an
outside, or independent, director.

Theoretically, the control of a company is divided between two bodies: the board of directors, and the http://en.wikipedia.org/wiki/Stockholder in http://en.wikipedia.org/wiki/General_meeting. . In small private companies, the directors and the
shareholders will normally be the same people, and thus there is no
real division of power. .

LUCKIEST

Re: Board members and business owners

Excellent — Tue, 13 Nov 2007 20:57:33 GMT

I agree it's good to give back but only if the business can afford it. You're in business to make money, not lose it.

Re: Board members and business owners

Ed O'Gee — Tue, 13 Nov 2007 20:09:49 GMT

agree with BDS but excellent does make a point. I think a good thing for you to do is to put up blind bids. Whatever your business is, you'll bid on the non profits business just like everyone else. You should take yourself out of the contract review process and leave that up to other board members, that way there is no real conflict.