Have you ever sat through an AGM, bored out of your mind thinking "why do we even do this stupid meeting every year?"
One of the many issues that the WE charity situation has brought forward is the importance of solid charity governance. Here is an overview of charity governance so that you can better understand your role as a Board member, volunteer or staff person.
CEO is the top staff person
Generally the head staff person for a charity is the CEO. Other titles can be President or Executive Director (ED). This is usually a paid position for an organization. Generally, all staff report either directly or indirectly through managers, to the CEO.
The CEO is an employee and like any employee they have a boss. The CEO reports to the Board. Often the Board will delegate daily supervision to the Board Chair to do things like approve expenses, vacation, and keep open lines of communication between the Board and CEO. (The title President can be confusing because in some charities that title is held by the CEO and in others by the Board Chair.)
The CEO reports to a volunteer board
The Board of Directors are a volunteer role for charities. They are elected by members (we'll get to members next). Board members set the strategic direction for a charity. For large charities, they provide oversight but do not get involved in the day-to-day operations. For smaller charities, particularly those without paid staff, the board both govern the organization and do the roll-up-the-sleeves work of the organization.
The Board holds fiduciary responsibility for the organization which means that they are responsible for making sure everything is run legally and ethically in the organization. For this reason, many charities have Directors and Officers (D&O) insurance.
Who are members and why they are important
The Board is elected by members of the organization. Some charities have “open” memberships where anyone can be a member. Sometimes you can become a member by paying a certain amount. Some organizations, particularly small, grassroot ones, may have a more informal definition of who is a member.
Every year at the Annual General Meeting (AGM), the members come together to elect the Board members and also to approve the audited financial statements. The role of the members is to be a counter-check on the Board. Since charities do not pay income tax, the members are the eyes and ears of the Canadian taxpayer to make sure things are legitimate.
And about that boring AGM
So the next time, a charity you care about invites you to the AGM, you should attend. Not only that, but read the financial statements and ask a question. Check out the biographies of the Board members and make sure they appear to be a good fit for the charity.
Most charities are great - hard working, smart, and capable. But WE Charity has shown there are a few bad apples. If you have invested a gift or volunteered for a charity, you should make sure that they are doing their duty. A great way to do that is to attend their AGM.
Ann Rosenfield is both staff for a charity and also serves as a Board leader for Rainbow Railroad. She thinks AGMs are dull but super important.
