You are here

How do we deal with non-functioning officers?

Your Legal Questions Answered

How do we deal with non-functioning officers?

The treasurer of our 501(c)(3) nonprofit club, a local chapter of a national and international organization, has not done his job for a year.  As Secretary, I have been the only one to raise the issue.  The President and Treasurer have made it impossible for the board to draw up a budget, so the President commits the club without knowledge or permission.  The Treasurer deposited all our funds into a credit union he heads up, which I believe is a clear conflict of interest. He and the President write checks with their sole signatures in violation of our bylaws requiring two signatures. My requests for information such as invoices, statements, and even the name of our new accountant, have been denied. The Board treats my concerns as negative and I was accused by our incoming President of fomenting mistrust. As an officer, do I have a duty to report our club to the Attorney General for non-compliance?  

I wouldn’t start with the Attorney General.  I would start with anyone else on the board who might support your point of view, and with the members who elect the directors.  They should be concerned about the dysfunction and may help you seek to cure it.  You might have to run for President yourself to get the power you need to clean up the operations.

You could also ask the bank not to honor checks with a single signature.  But your most effective help could come from the national organization of which you are a part.  They don’t want to read in the media about things blowing up at your chapter.  They undoubtedly have some leverage in helping the organization adopt reasonable governing practices.

Your examples of dysfunction don’t sound criminal and a local prosecutor or attorney general may not want to get involved in disputes between factions within the club.  In addition, your organization is part of a well-respected network and you may not want to sabotage its reputation with breach of fiduciary duty or criminal litigation.  These officers won’t be there forever and if you can’t change things now, you may just want to get off the board until you see the beginnings of a natural correction.

Tuesday, November 26, 2019

Sign-up for our free weekly Q&A

Add new comment

Sign-up for our weekly Q&A; get a free report on electioneering