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“Why Do We Need Members? We Have a Board…”

“Where it is desired that there only be a board, it is usually possible for the board and members to be the same self-perpetuating group.  When a non-profit is structured in this way, mission drift can be prevented.  On the negative side, however, fresh ideas can also be prevented. In order to keep proper books and records, organizations with self-perpetuating boards need to be careful to ensure that directors’ decisions are made (and shown in corporate records to have been made) at directors’ meetings and that decisions made at members’ meetings are similarly reflected.  This helps to ensure that at various times there is no question as to the correct fiduciary standard to be applied to individuals serving as both directors and members.

“Canadian charitable and non-profit corporations need to have both directors and members, unless incorporated by special act.  The fact that directors owe fiduciary duties not owed by members does not prevent directors and members from being the same people.”

Please read Robert Hayhoe’s full article at the Miller Thomson Website.

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