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Difference between revisions of "10 Changes in the New Societies Act You Should Know About"
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10 Changes in the New Societies Act You Should Know About (view source)
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The Act imposes duties on all senior managers, including the duty to act “honestly and in good faith with a view to the best interests of the society” and the duty to disclose a conflict of interest (see the next item). The Act also limits the liability of senior managers, inviting a court to relieve the manager from liability for any negligence or breach if the manager “acted honestly and reasonably and ought fairly to be excused”. | The Act imposes duties on all senior managers, including the duty to act “honestly and in good faith with a view to the best interests of the society” and the duty to disclose a conflict of interest (see the next item). The Act also limits the liability of senior managers, inviting a court to relieve the manager from liability for any negligence or breach if the manager “acted honestly and reasonably and ought fairly to be excused”. | ||
==8. There are expanded procedures for managing conflicts of interest== | |||
Under the new Act, there are expanded procedures for how conflicts of interest are managed. A conflict of interest is a situation in which someone has a duty to act in the best interests of an organization, yet they may have personal interests that conflict with that duty. For example, a board director may work at a law firm that the society is considering retaining. Or an executive director may be related to a web designer that the society is contemplating hiring. | |||
A director or senior manager is in a conflict of interest when they have a “direct or indirect material interest” in a contract or transaction with the society or a matter for consideration by the board. A “material interest” is an interest that is not insignificant and could reasonably be considered to affect a person’s decision-making. | |||
A director or senior manager who is in a conflict of interest must: | |||
* promptly and fully disclose the conflict to the directors | |||
* leave the room during any discussion or vote at a board meeting on the conflict matter | |||
* refrain from any action intended to influence the discussion or vote | |||
* in the case of a director, abstain from voting on the conflict matter | |||
As well, societies must now keep records of any disclosures by directors or senior managers of a conflict of interest. | |||
{{Transitioning an Existing Society Navbox}} | {{Transitioning an Existing Society Navbox}} | ||
