Operations and Finances

Duties of the Board

Individually board members do not carry special authority or power except as specifically requested by the board to carry out certain functions. Authority and power are vested in the board as a whole via the bylaws which should spell out the authority vested in each board office. Even though the corporate structure in general protects individual board members from liability for affiliate decisions, board members are expected to act in accordance with certain legal standards.  

Duty of Care 
Also known as the business judgment rule, the duty of care is defined as "care that an ordinarily prudent person would exercise in a like position and under similar circumstances." This means that each board member is expected to stay informed and to ask questions. Reading minutes and background materials for proposed decisions, asking questions when clarification is needed and participating in board deliberations are examples of how to exercise the duty of care. 

Duty of Loyalty 
The duty of loyalty is a standard of faithfulness; a board member must give undivided allegiance when making decisions affecting the organization. This means that a board member can never use information obtained as a member for personal gain, but must act in the best interests of the organization.  Board members should disclose potential conflicts of interest and refrain from participating in the board’s discussion and voting on the matter in question. All boards should have conflicts of interest policies that cover likely conflict situations, such as business dealings, nepotism or inurement. 

Duty of Obedience 
The duty of obedience requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission.  

Presidents Role 
Presidents should ensure all board members understand these duties and act according to them.  

Affiliate's Relationship to the Academy

Affiliate associations have several legal requirements and responsibilities related to their relationship with the Academy of Nutrition and Dietetics.  The Academy’s bylaws give it the authority to accept the affiliate organization, and the Academy thus reviews affiliate bylaws to determine acceptance and assure that the affiliate is structured in a manner consistent with the Academy’s policies.  As an affiliate, you can speak only for your association; you cannot legally act for or on behalf of the Academy, as the Academy cannot speak for your affiliate association. 

Affiliate dietetic associations are separate legal entities of the Academy of Nutrition and Dietetics. 
A legal entity is one that is recognized under the law to conduct business and sue or be sued on its own behalf. State law recognizes several kinds of entities, the most notable of which are corporations, limited liability partnerships, and unincorporated associations. All Academy affiliates are incorporated, which establishes them as separate legal entities that can enter into contracts and be sued or sue in their own name. 

What is Incorporation? 
Incorporation is the process by which a corporation, the preferable entity for the Academy and its affiliates, is formed under state law.  A corporation’s “Articles of Incorporation” is the basic organizational document that causes the state to provide a separate legal existence for the Association in return for the Association’s commitment to abide by the state's rules for incorporated associations.  

What is required of incorporated associations? 
Corporations are responsible for filing their periodic reports with state and federal authorities and preparing and submitting filing tax returns with the IRS and the state, most likely on a yearly basis.  An affiliate of the Academy also takes on certain contractual obligations, including maintaining proper association insurance coverage through the Academy.  

Presidents Role 
The President should ensure the affiliate files necessary periodic reports with state and federal authorizes in a timely manner.  In addition, the President should ensure the articles of incorporation, past filings and association bylaws are kept in the affiliate’s files.