Fiduciary duties can't be stated enough. The following is a piece from a Phillipines paper. Good to see and nicely stated in my opinion. Were I to develop a board manual, following the statement of mission, values and organization's Theory of Change, I would post the following and make this the core of the on-boarding exercise and then ensure that all review it aloud at the annual meeting.
Continuing from my August 10 column, “Traits of High-Performing Association Boards”, let me share the fiduciary duties of association boards that I learned from the extensive knowledge resources of the American Society of Association Executives (Asae), of which I am a member. These principles are universal and applicable in the Philippine association setting.
A “fiduciary duty” is defined as “a legal obligation of one party to act in the best interest of another”. In the context of Philippine associations, the elected members of the Board of Trustees (BOT) act in the interest of their members. It is the responsibility of the BOT to see to it that they collectively work for the benefit of their association and its members. Here are the three fundamental fiduciary duties of the BOT:
Duty of Care—Requires taking care and exercising judgment that any reasonable and prudent person would exhibit in the process of making informed decisions, including acting in good faith, consistent with what you, as a member of the board, truly believes is in the best interest of the association. Examples of duty of care include preparing for and attending board meetings regularly, voting independently, paying attention to organizational activities and operations and delegating only to responsible individuals and following up conscientiously.
Duty of Loyalty—Calls for consideration and action in good faith to advance the interests of the association. Simply put: board members will not authorize or engage in transactions except those in which the best possible outcomes or terms for the association can be achieved. This standard constrains a board member from participating in board discussions and decisions when they, as an individual, have a conflict of interest. Examples of duty of loyalty are putting interests of the association before personal and professional interests and divulging any conflict of interest and not participating in related transactions.
Duty of Obedience—Requires obedience to the association’s mission, bylaws and policies, as well as honoring the terms and conditions of other standards of appropriate behavior, such as laws, rules and regulations. Examples of duty of obedience are living the association’s purpose and mission, complying with all applicable laws and the association’s governing documents, and insuring that approved and valid decisions are implemented.