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Your Board

Hi, I'm Your Board

Outpost's Board of Directors will use this blog to discuss issues the board is exploring as it envisions Outpost's future. Can't make it to a meeting? Check here frequently to read what the Board is up to. Your current Outpost Board of Directors,...
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Your Board

Sounding Board

Sounding Board
By Your Board on March 5, 2019

This post is a reflection on how Outpost directors start every board meeting. It was inspired by some recent training I provided to the Board about our fiduciary duty to the organization.

Before every Outpost board meeting, we go around the room and “check in.” While it’s not uncommon to provide a bit of personal news, the main reason is to report that we have come to the meeting prepared, and without any new conflicts. While making this affirmation can seem like a formality, it’s not. It’s an important reminder of the bare minimum legal requirement for us to do our job. It was this last bit that had caused me to do some personal reflection.

The training I provided on directors’ legal obligations began last year, and focused on the Wisconsin cooperative statute. This year’s training focused on the common law (judge-made historical caselaw) of fiduciary duty as it relates to corporate directors. The latter provides for two fiduciary duties: the duty of loyalty and the duty of care. The duty of care relates to competence - to make decisions on the basis of reasonably adequate information. The duty of loyalty is the prohibition against taking personal advantage of your office.

In our discussions, we applied these concepts to real-life examples, like whether directors have a duty to maximize profits. They don’t. Directors have great latitude in how they guide the organization – as long as they are prepared and have no conflicts. This is referred to as the Business Judgment Rule.

During these trainings, I was reminded that we all come to our job as directors with our own values, beliefs, and judgments about the world. And we are free to use those values, beliefs, and judgments in taking our positions – as long as we do so with clean hands and a pure heart. Also, that we apply our reasoning with adequate information. So the more complicated the issue, the more informed we must be, and the more introspective and honest with ourselves to determine if we are acting without divided loyalty. 

 

Jan Pierce

Board Treasurer

 

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