1. Copyright 2012© Protecting Members of the Board An Ounce of Prevention is Worth a Ton of Cure!

2. What are the Allegations? Decision-making errors Handling Finances incorrectly Conflict of Interest: Awarding Contracts Employment Compensation Hiring/Firing Decisions and Process Employee Tax Withholding Breaks from the Denomination Sexual Misconduct 15 Passenger Van Use

3. Consequences of Allegations Suing for Money! And Lots of it! Board Members Personally Sued Board Members have immunity under Federal Law Lengthy and Expensive Process to Prove they Deserve Immunity Personal loss of Reputation

4. What Can be Done to Minimize Risk? Be Proactive! Have a Written Job Description – Qualifications – Reporting and Supervisory Responsibilities – Duties and Expectations – Term of Service – Meeting Attendance Requirements

5. Training and Orientation Copies of Church Charter/Articles of Incorporation – Bylaws and Governing Documents Church Policies and Procedures Discuss how Decisions are Made Financial Statements

6. Training and Orientation Previous Meeting Minutes Minutes from other Committees that may Affect Board Training Materials www.nonprofitrisk.orgwww.nonprofitrisk.org www.christianleadershipalliance.com Explain their Fiduciary Responsibility: Prudent Man Act Dealing with Conflicts of Interest

7. Steps to Deal with Conflict of Interest The Transaction is Fully Disclosed in the Church’s Audited Financial Statements; The Board Member is Excluded from the Discussion and Approval of the Transaction; A Competitive Bid or Comparable Valuation is Obtained; and The Church Board has Demonstrated that the Transaction is in the Best Interest of the Church Evangelical Council of Financial Accountability (ECFA)

8. What Can be Done to Minimize Risk? Have a Written Policy and Procedure Include an Indemnification Clause: Hold Harmless Agreement Directors and Officers Liability Insurance Be Consistent Transition Process for New Board Members Staggered Terms of Service

9. Policy and Procedure For a FREE copy of a policy and procedure regarding board members, contact David Rutledge at info@yourchurchmatters.cominfo@yourchurchmatters.com

10. What Questions do you have for me? 559 287-7840 cell 559 256-0858 direct line rwiltrout@csbc.com