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2.
Legal and Ethical Responsibilities of a Board
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Duty of Care
“Directors of Minnesota nonprofit corporations must discharge their duties in good faith, in a manner the director reasonably believes to be in the best interests of the corporation, and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.”
Duty of Loyalty
“…directors should avoid using their position or the organization’s assets in a way which would result in pecuniary or monetary gain for them or for any member of their family. A director should put the good of the organization first and avoid engaging in transactions with the organization from which the director will benefit.”
Duty of Obedience
“Directors have a duty to follow the organization’s governing documents (articles of incorporation and bylaws), to carry out the organization’s mission and to assure that funds are used for lawful purposes. Also, directors must comply with state and federal laws that relate to the organization and the way in which it conducts its business.”
References
DC Board Orientation Presentation
From the Office of MN Attorney General: Fiduciary Duties of Directors of Charitable Organizations – full text in Board Manual
