In this section:

• Mandate of the Board
• Composition of the Board
• Duty of Knowledge 
• Duty of Care 
• Duty of Diligence 
• Duty to Act Within the Scope of Authority 
• Liability
• Expenses 
• Board Members Responsibilities and Expectations

MANDATE OF THE BOARD

The Board of Directors is the governing body of the Chamber between Annual or Special Meetings of the membership. It is mandated to provide governance over the business of the Chamber and to oversee its financial transactions (standard fiduciary responsibility), and is responsible for the interpretation and promotion of policies approved by the membership and for ensuring these are implemented. The Board has responsibility for governing: leadership and direction; conditions and constraints; oversight of performance; knowledge of stakeholder expectations, needs, concerns and interests; acting in the best interests of the organization; and ensuring the financial sustainability of the organization.

COMPOSITION OF THE BOARD 

The composition of the Board is set out in the Chamber’s by-laws. There are eight Officers, eight Chamber representatives, eight corporate representatives, two Past Chairs, and four Directors at large appointed by the Chair and a number of ex-officio representatives. All representatives are elected with the exception of the Past Chair.

DUTY OF KNOWLEDGE

A Director of any corporation, for-profit or non-profit, must have a basic knowledge of the organization. At a minimum, all Directors should make it their business to be aware of the requirements of the internal governance mechanisms by which the Board operates – in our case, the Chamber’s by-laws and policies. Similarly, all Directors must understand what the organization does in practice and how it puts its policies into action.

The orientation of all new Board members is considered a fundamental prerequisite to full participation in the processes of the Board. The Chamber begins its orientation at the moment each Director is nominated, through the provision of background information. In addition, an orientation session is held annually. Directors must consider that the duties of their office include an obligation to review, at least annually, the mission, vision, and objectives of the Chamber to ensure that they remain consistent with the objects of the Chamber as set out in the by-laws. Because of the stable foundation that the by-laws provide for an association, alterations are not undertaken lightly or hastily but only after careful reflection on the available alternatives. The Chamber’s by-laws govern its internal workings and, until altered in accordance with the provisions governing amendments, Directors must comply with their terms. This applies both to the substance of the particular provisions and the timing as outlined therein. As soon as possible after their election new members of the Board will each be provided with orientation presentation from staff concerning the activities of the chamber and be directed to an online resource which contains the Directors handbook.

DUTY OF CARE 

Directors of the Chamber have a duty to act in accordance with a minimum standard of care, and might incur personal liability where their conduct falls short of this criterion. In the case of non-profit corporations, such as the Chamber, this is a common law standard of care which is expressed as “what may reasonably be expected from a person of such person’s knowledge and experience”. Generally speaking, it is expected that Directors will (a) act honestly and in good faith in the best interests of the association; and (b) exercise the care, diligence and skill of a reasonably prudent person in exercising their powers and performing their duties as a Director.

In recent years, concern has arisen among current and potential Directors of certain non-profits (in most instances, charitable organizations) regarding their liability, since Directors of charitable organizations have been held to the same standard of care as trustees who manage charitable trusts. However, this situation does not apply in the case of the Chamber, and Directors who honestly meet basic standards of care and conduct will not be liable for simple errors of business judgment that might occur while the Directors performs their duties of office.

DUTY OF DILIGENCE 

To discharge this duty, Directors must act in the best interests of the Chamber and must make it their job to be as fully informed as reasonably possible with respect to all aspects of its work. As such, Directors are accountable to the Chamber and must act prudently and reasonably in attempting to preserve its integrity and reputation.

On a practical level, the duty of diligence involves becoming thoroughly acquainted with the Chamber’s purpose and policies, what tasks are delegated and to whom, and a general awareness of the operations of the organization.

One of the most significant parts of this duty requires a Director generally to exercise the level of care of an ordinary person for the following purposes:

a.  to review the agenda and related material in advance of each meeting (In practice, the dates and venues are confirmed and advertised some 12 months in advance. The working documentation for each Board meeting is customarily forwarded to all Directors approx seven prior to the meeting);

b. to attend meetings of the Board and committees to which he/she may be appointed (At the beginning of each term, most Directors are assigned to a Committee of the Board, and are encouraged to accept additional responsibilities);

c. to be ready to discuss the business before the meeting in a prepared and knowledgeable way; and

d.  to vote – unless excluded by reason of conflict of interest or other prohibition – on matters that come before the meeting.

If attendance at a meeting is not possible, a Director should review the minutes of the meeting, including the financial statements and other documents in order to stay informed. This will be particularly important should it ever occur that an illegal or similar act is undertaken at a meeting. Directors could be liable unless they immediately register a dissent.

The Board is a ‘working Board’ that demands the active participation of all those who serve. Accordingly, as a matter of Board policy, the Corporate Secretary will keep attendance records and shall bring to the attention of the Chair of the Nominating & Governance Committee and/or the Chair of the Board, for their consideration, any Director, who barring exceptional circumstances, fails to attend three consecutive Board Meetings. Any Director missing three consecutive meeting will be deemed to have vacated his / her position on the Board.

DUTY TO GOVERN

In broad terms, the Directors of the Chamber have the duty to oversee the management of the affairs of the Chamber between Annual Meetings and to apply the by-laws. This duty could be said to apply to the appointment of management, the establishment of policies, and the provision of guidance. There is a distinction, clearly delineated, between the duties and obligations of the Directors and those of the staff. The Directors are responsible for establishing policies and goals, the management for implementing them, and the Directors for assessing management’s implementation of them. Some of this work may be performed via committees of the Board and Directors are encouraged to participate and share their expertise both at the Board and committee levels.

In the Chamber, the Directors’ relationship with the management and staff is maintained through the President and CEO.

Directors are also representatives of the membership. As such, they are not authorized to speak officially for the Chamber, except on those items upon which the association has formulated and approved a policy. They should defend the organization from unjust criticism, or bring to the attention of the Board such criticisms as are judged to be justified. If approached by the news media for a statement on behalf of the organization, they should refer to the Board Chair or the President and CEO for guidance. The Chamber is a non-partisan organization.

DUTY TO AVOID CONFLICTS OF INTEREST

Directors of non-profit corporations, such as the Chamber, are held to strict standards of honesty and loyalty and are required to avoid situations involving a conflict between their personal interest and those of the corporation. In particular, Directors are precluded from using corporate property for personal benefit and from appropriating a business opportunity properly belonging to the corporation. In addition, a Director is not allowed to directly or indirectly receive any benefit or payment from the Chamber, except for reimbursement of reasonable expenses in accordance with the Chamber’s policies. The pecuniary interests of immediate family members or close personal or business associates of a Director are considered to also be the pecuniary interests of the Director. Fiduciary obligation can generally be discharged by complying with section 98 of the Canada Corporations Act, which states that a Director must disclose his or her interest in a contract with the corporation at the first Board meeting at which the possibility of entering into the contract is considered and must subsequently, refrain from voting.

DUTY TO ACT WITHIN THE SCOPE OF AUTHORITY

It is vital that Directors of the Chamber understand both the scope of their own authority and that of the Chamber. Generally speaking, a combination of the objects, the by-laws, the policies and the resolutions of the membership and the Board outline the permitted activities of the association, as well as the authority of individual Directors.

Personal liability can attach to any Director who, by conscious action or by neglect, permits the Chamber to carry on activities that are ultra vires of the by-laws. Liability may also be incurred when a Director acts outside the scope of the authority granted to Board members in the by-laws or policies.

Avoidance of personal liability in these situations is simple and straightforward. The Director should oppose the action in question at the meeting at which the action is authorized by the Board (or, if  not present, at the first meeting attended thereafter) and should demand that this opposition be recorded in the minutes at which the dissent is made.

LIABILITY  

Directors and officers of non-profit organizations are generally subject to the same liabilities imposed on management of commercial corporations. Directors are responsible for ensuring the Chamber complies with applicable laws, its letters patent and its by-laws. As in commercial corporations, non-profit Directors and officers should ensure that they are familiar with the liabilities that can be imposed under employment, environmental and financial reporting law as well as under the withholding provisions of taxation law.

Various statutes oblige the Chamber, like for-profit organizations, to file annual returns and to collect and remit payroll deductions and taxes. In the Chamber, the Treasurer and Audit Committee exercise due diligence in this area on behalf of the Directors and submit regularly to the Board of Directors certificates of compliance related thereto.

In addition to encouraging its Directors to observe appropriate standards of care, the Chamber has taken steps to minimize the exposure of its Directors to legal liability. Director’s liability insurance in the amount of $3 million for the Board as a whole is maintained through the Chamber, which pays the premiums on the Directors’ behalf.

EXPENSES

Because the Chamber is a non-profit organization, service on the Board is generally a ‘pay-as-you-go’ proposition. Directors are expected, wherever possible, to arrange business travel in conjunction with Chamber meetings and to pay their own travel and accommodation expenses. Group meal functions that are held during Board or committee meetings are covered by the Chamber budget.

To cover exceptional circumstances in which this may not be possible, the Board may establish rules covering the reimbursement of reasonable expenses incurred by Directors in attending meetings of the Board or Executive Committee (other than those held in conjunction with the Annual Meeting). This policy is reviewed on an annual basis in conjunction with the preparation of the Chamber’s operating budget.

BOARD MEMBERS RESPONSIBILITIES AND EXPECTATIONS 

The following are some roles, responsibilities and expectations for all board members which will maximize their contributions as Directors to Board effectiveness and support for the organization’s sustainability:

a. Participate actively in the business of the Board and make a positive contribution to providing visionary leadership and direction to the organization;

b. Oversee the governance of the affairs of the organization;

c. Act honestly, in good faith and in best interests of the organization;    

d. Stay informed on matters relevant to governing the organization;

e. Do not speak as an individual on behalf of the Board unless authorized;

f. Come to meetings having read prepared material;

g. Make a concentrated effort to attend all Board meetings and to notify the chair of your inability to attend any Board meeting. If you find that you are likely too  miss more than three meetings in a row and therefore unable to fulfill your obligations, you should seriously consider whether it is prudent for you to remain as a director. In case three meetings are missed without reasonable and acceptable notification the Board seat is deemed vacated;

h. Attend the Chamber Annual meeting and retreat;

i. Participate and support in as many of the events and activities as is possible;

j. Participate, if possible, in committees or task groups;

k. Seek and encourage non-members to become members of the chamber;

l. Deal with all Provincial policy issues brought forward to the Board;

m. Participate in the strategic planning of the MCC; and

n. Meet regularly at least four times a year on dates determined by the Board.