February 18, 2015
When it comes to lending your expertise to a board of directors there is no shortage of opinion. Here are five key things you’ll be glad you considered before joining that board. Enjoy.
Structure of the Board
Joining a board is no different than starting a relationship. Do you want to associate with someone who doesn’t share your values? Probably not. Review the mission and vision, are they aligned with what matters to you?
Ask questions. Do they have a strategic plan? Who are their key stakeholders? What is their mandate and how is the board structured? Is your particular skill set needed?
Are they Managing Risk?
Organizations large and small are impacted by a lack of strategy when it comes to risk mitigation. As a member of its Board of Directors you will oversee the risk management process of that organization. Be it financial, compliance, governance, information technology, reputation, operations, or strategy, risk management needs to be regularly monitored. Know what you are getting into by asking to see the organization’s risk management strategy before agreeing to join.
Make sure the organization carries Directors’ & Officers’ Liability Insurance. This protects a Board Member like you in the event of legal action against the organization and Board Members. Ask to review the insurance policy, insurance coverage and the associated deductible. As a Board Member guarantee this coverage remains in place each year by asking for proof of payment.
Source Deduction Remittances and Harmonized Sales Tax (HST)
Board members can be personally liable for any unremitted source deductions, HST and associated penalties and interest. One individual in payroll improperly handling source deductions, remuneration or the associated HST can cause more than just a headache. Ask how you can regularly be assured of timely proof of payment on source deduction and HST remittances.
If the board is for a charitable organization, go online to Canada Revenue Agency’s website to ensure their charitable status is in good standing. If you choose to join the Board than ensure the T3010 Registered Charity Information Return is prepared annually so the organization maintains their charitable status. The Canada Revenue Agency’s website has a helpful section that covers the responsibilities that Board of Directors for not-for-profit organizations should consider visiting.
If you require additional information it’s better not to guess. A quick phone call could save you time, stress and frustration. Please feel free to contact us at 902-835-7333.
Written by Jennifer Abbey, CA and Monita Taylor, CA
A PDF copy is available HERE