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- Memo to Board Members: There are times when we must close—not continue with “conditions”—chapters
Newsletter > March 2014 > "Memo to Board Members: There are times when we must close—not continue with “conditions”—chapters"
Memo to Board Members: There are times when we must close—not continue with “conditions”—chapters
Fiduciary duty: The duty owed to a non-profit association, by its directors, to exercise reasonable care, prudence, good faith and loyalty to the best interests of the association.
Black’s Law Dictionary provides an additional definition to “Fiduciary” as in, “…trust…confidence…scrupulous good faith and candor”
We continue to hear about members of fraternal boards of directors—certainly not all or even a majority of members — who consistently oppose any decision to revoke the charter of an active chapter. Even when the facts regarding chapter member behavior and violations of policies are aggravated, these individuals will oppose the closing of a chapter. The reasons are neither new nor unique and usually include:
“I was elected to the board to grow the fraternity/to increase our presence/improve our numbers”
“Our job is to open chapters, not to close them”
“There are some good members in that chapter! We just have to find them!”
“We’re better off with this chapter active than inactive”
“The alumni will (a) revolt (b) stop donating (c) come together and help the chapter”
“Give them another chance”
“ I will go there personally and talk with them”
Board members serve in a fiduciary capacity. Great trust and confidence are placed in our volunteer leaders, who are most often elected at conventions, to lead our organizations guided by reasonable care, good faith and loyalty to the association.
Translation: There are times in every national men’s or women’s fraternity or sorority when a chapter must be closed. Usually, but not always, it is because of consistent violations of policy and procedure. Sometimes, it is because the chapter members have simply surrendered to the forces of reality—our undergraduates are not enjoying their experience and they know that it isn’t going to change. Sometimes, it is because of a one-time tsunami-level situation—a hazing death, for example–that calls for revocation of the charter. And on occasion, the undergraduate members themselves may candidly acknowledge that it is time to close.
Blind loyalty to the concept that a board of directors must stand by a group of undergraduates until all options have been exhausted and all alternatives have been tried does not meet the fiduciary duty test– prudence, good faith and loyalty to the best interests of the association.
A saying that has been employed by attorneys since judges and juries became triers of fact is, “When the facts are against you, argue the law. When the law is against you, argue the facts”
In cases involving the revocation of a charter, the facts are usually uncontested and abundant. Staff members and/or volunteers have provided ample information that will serve as a basis for the decision. No one has to remind the Chief Staff Officer that closing a chapter is serious business. She or he has compiled the information and prepared a recommendation—the facts.
But, the “law” in these cases is established by the members of the board of directors. And the authority of the board of directors to grant a charter carries with it the responsibility to determine when a charter must be revoked. The bylaws may address negative behavior in general terms, but it is the responsibility of the board to define those words and terms, and to then exercise its discretion when needed. That requires the very elements that define fiduciary duty: good faith, loyalty to the association, reasonable care…and courage.
In reality, boards of directors don’t make the decision to revoke a charter. It is the undergraduate members of a chapter who make that decision. The board simply confirms the choice of the undergraduates.
While arguably no one enjoys preparing a recommendation for or deciding to close a chapter, it is an important aspect of the fiduciary duty of being a national officer. As one volunteer stated, “You have to be a 360 degree national officer—not just a 180.” Translation: There will always be tough choices along with the easy and positive decisions. The litmus test for a CSO of a fraternal organization may well be, “Will I sleep more soundly tonight knowing that this chapter is inactive?” Sometimes, the answer is “Yes.”
Dave Westol is an attorney licensed to practice in the State of Michigan. He is Principal and Owner of Limberlost Consulting, Inc. in Carmel, Indiana. Dave consults with a number of national fraternities and sororities and other non-profit associations. His website is Limberlostconsulting.com and he can be contacted at: @Limberlost1 or David.Westol@gmail.com