Nonprofit Board Member Conflicts of Interest

A board member of a charitable nonprofit organization may find themselves in an awkward position where the board is voting on a matter in which the board member has a conflict of interest. Perhaps the matter has to do with contracting the board member or their company, paying the board member for some service they […]

Restatement of the Law: Duty of Loyalty

The ALI Restatement of the Law, Charitable Nonprofit Organizations (the “Restatement”) provides: “A fiduciary of a charity has a duty to: … [a]ct in good faith and in a manner the fiduciary believes to be in the best interests of the charity in light of its purposes ….” The Restatement explains: [W]ith the exception of […]

Duty of Loyalty – Part 2

In our earlier post on the Duty of Loyalty – Part 1, we discussed conflicts of interest, self-dealing (under California law), and excess benefit transactions. In this post, we’ll examine other aspects of the duty of loyalty: confidentiality and corporate opportunities. This post continues to address these fiduciary issues from the perspective of a director of a California nonprofit public […]

Duty of Loyalty – Part 1

Meeting a director’s duty of loyalty generally requires acting in good faith and in the best interests of the corporation.  The key to meeting this duty is to place the interests of the corporation before the director’s own interests or the interests of another person or entity.  This post discusses aspects of the duty of […]