The board has responsibility for maintaining legal and ethical accountability for its leadership, staff and volunteers.
Your Legal Responsibilities as a Charter School Board Member
Charter school board members are typically very passionate about the school and the students that they serve. Charter school board members are volunteers and yet they carry the responsibility of the organization on their shoulders. It’s important that all board members of charter schools, just like other non-profit organizations, understand the legal responsibilities that they hold relative to their positions on the board. Failing to fulfill their responsibilities according to the law may have individual consequences as well as consequences to the organization.
A non-profit charter school board oversees the organization’s assets and makes sure that the non-profit is on sound financial footing.
Active oversight includes watching over the organization’s operations. The board has responsibility for maintaining legal and ethical accountability for its leadership, staff and volunteers.
The principles of non-profit corporation law are well established.
All board members must meet certain standards of conduct and pay strict attention to their individual and collective responsibilities to the organization and its members. Individual states have their own laws regarding legal responsibilities of board members that serve on charter school boards. Charter school board members should be aware of individual state laws that affect their position on the board.
In addition to state and federal charter school laws, the legal duties of non-profit board members are applicable and are defined nicely as “THE THREE D’S,” which include Duty of Care, Duty of Loyalty, and the Duty of Obedience.
DUTY OF CARE
Board members use their own judgment to participate in decision-making on behalf of the organization. The responsibility for making informed judgments lies with the board member, which means they need to be aware of the facts and ask questions to get clarity on the issues. Duty of care also means that board members should seek out independent professional advice when decisions relate to buying or selling significant assets or when entering into material contracts.
DUTY OF LOYALTY
Having a duty of loyalty means that board members must cast aside any personal or professional interests and place the interests of the non-profit ahead of them. Loyalty also means respecting the confidentiality of the organization’s affairs by not disclosing them to outside individuals in a way that leads to loss of opportunity for the organization.
DUTY OF OBEDIENCE
Board members have the responsibility for making sure that the organization complies with all federal, state, and local laws and regulations. It also means that board members should remain faithful to the organization’s vision and mission.
Board members should approve a conflict of interest policy and review and sign a conflict of interest disclosure statement annually to bring forward any potential conflicts that may unknowingly exist. Facing legal matters can be frightening for any board member, especially for unsuspecting volunteer members of a non-profit charter school board. It’s best to avoid potential liability at all costs.
When an individual board member or a full board fails to comply with statutory mandates and obligations, they can be held legally liable for criminal or civil penalties that have the potential to bankrupt the organization. From a legal perspective, the duty of care is commonly expressed as “care that an ordinarily prudent person would exercise in a like position and under similar circumstances.” Board members of charter school organizations should be familiar with this definition!
Board counsel should be retained at the onset of a new charter school board’s formation. Counsel should be consulted if there is a concern on how the board should take action or if a board should take action on a specific issue.
This article is published by Yvonne Adkins of Adkins & Company, a Kentucky based consulting group. We position charter schools for success by providing access to high quality services and expertise for boards, operators and authorizers.