FINANCIAL MANAGEMENT AND
LEGAL ISSUES FOR CHAPTERS
By Henry A. Hart
General Counsel
Society For Human Resource Management
July 19, 2012 Webcast
This webcast is provided as
general information for SHRM
chapters, and does not constitute
legal advice. Many of the issues
covered in this outline are
governed by specific state law;
and the chapter should consult
their legal counsel in their state
on such matters.
2
TABLE OF CONTENTS
 Potential Liabilities of Chapter
Directors and Officers
 Protections against Liabilities of
Chapter Directors and Officers
 Requirements For Sound
Operation of Tax-Exempt Entities
 Important Tax-Exempt Entity
Governance Policies
3
Potential Liabilities of Chapter Directors and Officers
BREACH OF FIDUCIARY DUTY AS A DIRECTOR OR OFFICER
 Identifying Applicable State Law
 Non-stock (or Non-profit) Corporation Act
 Prudent Man Standard
– good faith;
– with the care an ordinarily prudent person
in a like position would exercise under
similar circumstances; and
– in a manner the director reasonably
believes to be in the best interests of the
corporation.
4
Potential Liabilities of Chapter Directors and Officers
BREACH OF FIDUCIARY DUTY AS A DIRECTOR OR OFFICER (Cont.)
 Reliance on Others
 No Loans to Directors
5
Potential Liabilities of Chapter Directors and Officers
BREACH OF FIDUCIARY DUTY AS A DIRECTOR OR OFFICER (Cont.)
 Sarbanes Oxley Act (“Sox”) Considerations
 SOX does not apply to tax exempt organizations (except for
one whistle-blower section of the Act)
 But tax exempt organizations are increasingly choosing to
voluntarily comply with many of the SOX corporate
governance provisions
– Independent and competent audit committee
– Demonstrate that at least one member has financial
expertise
– Certified Financial Statements
– Conflict of Interest Policy/Code of Ethics (see pp. 25 and 26 of
IRS Form 1023 Instructions for model policy at
http://www.irs.gov/pub/irs-pdf/i1023.pdf)
6
Potential Liabilities of Chapter Directors and Officers
BREACH OF FIDUCIARY DUTY AS A DIRECTOR OR OFFICER (Cont.)
Tip for the Chapter Leader
 Exercise due care
 PREPARE for Board meetings
 Document in minutes that Board has closely reviewed
financials and other matters approved by the Board
 Make sure that when you rely on reports of officers,
committees, CPAs, or consultants, you have a
reasonable basis to conclude that they are qualified to
provide such reports.
 Don’t allow a person who has authority to write checks
on a chapter account be the only person who reviews
chapter bank statements
7
Potential Liabilities of Chapter Directors and Officers
DEFAMATION
 Defined
– Written (libel) or verbal (slander) statement
– Which is published to a third party
– Which injures another’s reputation, and
– Which is untrue
 Defenses
– Statement is in fact TRUE, or
– Qualified Privilege – If it applies defendant
prevails if no malice
8
Potential Liabilities of Chapter Directors and Officers
DEFAMATION (Cont.)
Tip for the Chapter Leader
 Be careful and fair.
 Put yourself in the qualified privilege - make sure
there is a chapter business need for any
potentially defamatory statement; and only make
the statement to those who have a chapter
business need to hear it.
 Particular areas to be careful:
– Allegation of ethical violations.
– Membership discipline or expulsion
– Discussion at chapter meetings or on bulletin
boards about vendors to the HR profession
9
Potential Liabilities of Chapter Directors and Officers
ANTITRUST
 Relevant Antitrust Statutes
– Section 1 of Federal Sherman Act prohibits any contract,
combination, or conspiracy in restraint of trade
– Section 5 of FTC Act prohibits unfair and deceptive practices
 General Antitrust Principles
– Rule of Reason v. Per Se Rule
– Lobbying Exemption
– Application of General Antitrust Principles to Activities of
SHRM Chapters
– Consultants
– Prices
– Forms
– Membership Discipline
– Services to Non-Members
– Surveys of prices, wages, or significant costs
10
Potential Liabilities of Chapter Directors and Officers
ANTITRUST (Cont.)
If conduct survey of price, wages, or other
significant costs of company, place in
FTC/DOJ safe harbor
 Survey gathered and compiled by third
party such as chapter.
 Report only aggregate statistics with each
reported statistic based on at least 5
responses with no response representing
more than 25% on a weighted basis.
 Information provided is at least 3 months
old.
11
Potential Liabilities of Chapter Directors and Officers
ANTITRUST (Cont.)
 Tip for the Chapter Leader - be careful to
recognize potential antitrust issues
 When consultants are discussing their
business – no fee discussions
 When expelling or denying membership to
a competitor of members of the chapter –be
fair and consistent; do not play favorites
 Wage surveys – put them in the FTC/DOJ
safe harbor described above.
12
Potential Liabilities of Chapter Directors and Officers
SERVING OF ALCOHOL AT ASSOCIATION FUNCTIONS
 Use a trained server
 Arrange for available alternate
transportation
 Check chapter insurance policies
13
Potential Liabilities of Chapter Directors and Officers
FAILURE TO PAY EMPLOYMENT TAXES
 Sections 6671 and 6672 of the Internal
Revenue Code
 those officers or employees of a
corporation, who are under a duty to collect
and turn over taxes such as employee
income/Social Security/Medicare taxes
 personally liable for any amount of such
tax which is not paid, if they willfully cause
the corporation to fail to pay such taxes
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Potential Liabilities of Chapter Directors and Officers
IRS EXCESS BENEFIT TRANSACTION (“EBT”) RULES - IRC 4958
 Covered Organizations - 501(c)(3) organizations (other than
private foundations) and 501(c)(4) organizations (NOT
501(c)(6) organizations)
 Tax imposed – on “Disqualified Persons” (25% of EBT) and
on those “Organizational Managers” (10% of EBT) who vote
for an EBT knowing that it is such a transaction, unless such
participation was not willful and is due to reasonable cause.
 Excess Benefit Transaction – a transaction in which an
economic benefit is provided by a Covered Organization
directly or indirectly for the benefit of a Disqualified Person,
and the value of the economic benefit provided exceeds the
value of the consideration (including performance of
services) received for providing the benefit.
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Potential Liabilities of Chapter Directors and Officers
IRS EXCESS BENEFIT TRANSACTION (Cont.)
 “Disqualified Persons” - at the time of the transaction (or
within 5 years before ) in a position to exercise substantial
influence over the organization. Voting directors, trustees,
Presidents, CEOs and COOs, and any other person who has
ultimate responsibility for managing the finances of a
covered organization are automatically “Disqualified
Persons;” other persons and entities are subject to a facts
and circumstances test.
 Safe Harbor
– The transaction is approved in advance by disinterested body
– relied upon appropriate data as to comparability prior to
making determination
– adequately documents before the later of its next meeting or
60 days after the vote
16
Protections Against Liability of Chapter Directors and Officers
INCORPORATE THE CHAPTER
 The corporate shell affords protection against liability.
 If an SHRM Chapter is incorporated, the member, officer or
director will not be liable for the contractual, tort or any other
liabilities of the chapter, merely because they are a member,
officer or director of the corporation.
 A few states like District of Columbia have adopted the
Uniform Unincorporated Nonprofit Association Act which
protects members of unincorporated non-profit entities from
liability of that entity
 But unless your state has adopted the Uniform
Unincorporated Nonprofit Association Act, the members of
your chapter may be personally liable for the liabilities of an
unincorporated chapter.
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Protections Against Liability of Chapter Directors and Officers
INDEMNIFICATION AND INSURANCE
 Most state Non-Stock Corporation Acts
allow corporation to indemnify officer or
director where they have acted in good
faith in what they believe is the best
interests of the corporation.
 Most state Non-Stock Corporation Acts
allow corporation to insure officers and
directors against conduct other than illegal
or intentional misconduct.
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Protections Against Liability of Chapter Directors and Officers
VOLUNTEER PROTECTION STATUTES – STATE LAWS
 Section 8.30(d) of the Model Non Profit Corporations Code
states that a director or officer who meets the prudent man
standard of care will not be liable by reason of having been a
director or officer.
 In addition, many states have volunteer protection statutes
which eliminate liability of directors and officers of non-profit
organizations
– some of these statutes apply only to directors and officers of
501(c)(3) charitable organization [most chapters are
501(c)(6)]
– others of these statutes apply only if the director or officer is
a volunteer, or cap his/her liability to the compensation
earned as a director or officer for the past 12 months.
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Protections Against Liability of Chapter Directors and Officers
FEDERAL VOLUNTEER PROTECTION STATUTE (42 U.S.C. § 14503)
 protects volunteers, including non-paid directors and
officers, of certain non-profit organizations, if
– acting within the scope of their responsibilities;
– properly licensed, if required;
– the harm was not caused by willful or criminal misconduct,
gross negligence, reckless misconduct or conscious, flagrant
indifference to the rights or safety of the person harmed; and
– not related to operation of a motor vehicle, boat or aircraft.
– 501(c)(3)’s and 501(c)(4)’s clearly covered
 Not clear if 501(c) (6) s are covered’ but legislative history
supports coverage.
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Protections Against Liability of Chapter Directors and Officers
RETAIN AND CONSULT WITH KNOWLEDGEABLE COUNSEL
 Knowledgeable about potential liabilities of
associations and association volunteers
 Consult with such counsel when you are
uncertain
 At a minimum, have a periodic (e.g.,
annual) “check-up” with association
counsel on chapter activities and new legal
developments
 Have Association counsel review meeting
agendas before meetings and review draft
minutes of meetings before adoption
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Questions ???
On
Potential Liabilities of Chapter
Directors and Officers
Or
Protections Against Liability of
Chapter Directors and Officers
22
Requirements For Sound Operation of Tax-Exempt Entities
FAMILIARIZE SELF WITH NON-STOCK CORPORATION ACT
 Non-stock (or Non-profit) Corporation Act of State Where
Incorporated will govern the internal operations of a nonstock corporation, including issues such as:
– duties of directors,
– rights and privileges of members and directors,
– quorum and notice requirements,
– required corporate records,
– removal of directors,
– indemnification.
 These State Non-stock Corporation Act provisions may be
fleshed out by the Articles of Incorporation or bylaws to the
extent not inconsistent with such state code provisions.
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Requirements For Sound Operation of Tax-Exempt Entities
CORPORATE RECORDS
 Look to Non-stock Corporation Act of state where incorporated.
 The Model NPC Act, adopted by many states, requires at Section
16.01 a non-stock corporation to:
(i) keep as permanent records, minutes of all meetings of
members, the Board of Directors and committees of the board (and
of all actions taken by such groups without a meeting);
(ii) maintain “appropriate” accounting records and a list of
member names and addresses; and
(iii) keep at its principle office its Articles of Incorporation,
bylaws, and all amendments thereto then currently in effect,
director resolutions relating to member rights, minutes of member
meetings for the past three years, correspondence to members
generally within the past three years, including financial statements
furnished for the past three years, a list of names, home and
business addresses of its current directors and officers, and its
most recent annual report filed with state officials.
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Requirements For Sound Operation of Tax-Exempt Entities
MEMBER INSPECTION OF CORPORATE RECORDS
 Section 16.02 of the Model NPC Act allows members to
inspect and copy those records required to be maintained at
the principle office of the corporation, upon at least five days
written notice; and members may also inspect and copy
accounting records and membership lists upon five business
days’ notice, provided that the inspection request is made in
good faith and for a proper purpose and describes with
particularity the records they wish to inspect; and further
provided that the membership list may not be used to solicit
money or for any commercial purpose or for any purpose
unrelated to a member’s interest as a member.
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Requirements For Sound Operation of Tax-Exempt Entities
DIFFERENCES BETWEEN 501(c)(6) and 501(c)(3) [Most chapters are 501(c)(6)]
501(c)(6)
501(c)(3)
Trade associations, professional
societies, business leagues
Educational, charitable,
religious
Use Form 1024 to apply
for exemption
Use Form 1023 to apply
for exemption
Charitable contributions are
not deductible
Charitable contributions
Are deductible
No restriction on lobbying
or political activities
May engage only in insubstantial
lobbying or political activities
(tested by specific expenditures if
make 501(h) election; otherwise
no more than 5%) May not engage
in any political activities
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Requirements For Sound Operation of Tax-Exempt Entities
DIFFERENCES BETWEEN 501(c)(6) AND 501(c)(3) (Cont.)
 Professional societies are on the borderline between
501(c)(6) and 501(c)(3).
 To the extent activities are primarily aimed at education, with
only incidental benefit to profession, 501(c)(3) status is
appropriate.
 To the extent they promote, more than incidentally, the
common business interests of their members, 501(c)(6) is
appropriate, not 501(c)(3).
 Much easier, and safer for chapter to apply for 501(c)(6);
very few chapters need the extra benefits of 501(c)(3) status
which would make it worth the extra difficulty in obtaining the
exemption, or worth the extra risk in maintaining the
exemption, or worth the extra regulations on a 501(c)(3)’s
activities.
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Requirements For Sound Operation of Tax-Exempt Entities
APPLYING FOR TAX EXEMPT STATUS
To apply for IRS determination letter a chapter must
file:
 Form 1024 or Form 1023 Application for 501(c)(6)
or 501(c)(3) respectively
 Form 8718 (one page; very simple) must be
accompanied by a one-time user fee ($400 if
annual gross receipts past 4 years averaged
$10,000 per year or less; otherwise $850). Form
8718 has address where to send application.
 And if legal counsel wants to communicate with
the IRS concerning the application, a power of
attorney on Form 2848 must also be provided with
the application
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Requirements For Sound Operation of Tax-Exempt Entities
FEDERAL TAX FILINGS
 Federal IRS Form 990 and 990-T – are
generally due on the 15th day of the fifth
month following the close of the tax year.
– The Form 990-T is filed only if chapter has
Unrelated Business Income in excess of
$1,000.
– The Form 990 need not be filed if chapter
normally has annual gross receipts of
$50,000 or less (but in such event, Form
990 N must be filed.)
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Requirements For Sound Operation of Tax-Exempt Entities
FEDERAL TAX FILINGS (Cont.)
 Federal IRS Form 990-N - Those chapters
exempted from the Form 990 filing
requirement on the basis that their
annual gross receipts are normally less
than $50,000 must file instead a minimal
annual electronic filing with the IRS on
Form 990-N. The 990-N is due on the
same date as would have been the Form
990.
30
Requirements For Sound Operation of Tax-Exempt Entities
FEDERAL TAX FILINGS (Cont.)
 Beginning with their 2007 tax years, failure to file
Form 990 or 990-N for three consecutive years
will result in revocation of tax-exempt status.
– Such organizations may regain exemption only by filing Form
1023 or 1024, as applicable.
– IRS also has published guidance on the re-application process
and its criteria for retroactive reinstatement. Small
organizations that were not required to file pre-2007 returns
and then were eligible to file the Form 990-N electronic
return may obtain retroactive reinstatement of their status
and pay a reduced application fee of $100 if they apply by
December 31, 2012. See Notice 2011-43, 2011-25 I.R.B. 882.
31
Requirements For Sound Operation of Tax-Exempt Entities
INITIAL SET UP FOR FEDERAL, STATE, AND LOCAL TAXES
 Obtain federal tax employer identification number, utilizing
IRS Form SS-4.
 Corporate income tax (most states accept federal IRS
determination letter; a few states require that application for
exemption from state income tax be filed; most states
impose state income tax only on federal unrelated business
income tax of tax exempt chapter;
 Employer income tax withholding;
 State/Local Sales Tax, Personal Property Tax, and Real
Property Tax Filings
 Local Gross Receipts Tax Filings ( i.e., business license tax)
– chapter may or may not be exempt)
 State Unemployment Tax
32
Requirements For Sound Operation of Tax-Exempt Entities
DUES NOTICES REQUIRED BY IRS
 IRC Section 6113 Non-Deductible Notice – IRC 501
organizations, other than 501(c)(3)’s, whose annual gross
receipts are normally more than $100,000 must include in
their dues solicitation a conspicuous statement that the dues
are not deductible as a charitable contribution for federal
income tax purposes.
 IRC Sections 162(e) and 6033(e) Notice of Non-deductibility
of Lobbying Expenses - Under IRC Sections 162(e) and
6033(e), a 501(c) organization, other than a 501(c)(3), must
include in its dues solicitation a notice of the estimate of the
portion of dues which is attributable to lobbying and political
activities and is therefore nondeductible. IRS Reg. 1.16220(d). Failure to include the notice will subject the
organization to a proxy tax at the highest corporate rate on
its lobbying and political expenditures.
33
Requirements For Sound Operation of Tax-Exempt Entities
PUBLIC INSPECTION OF CERTAIN TAX RECORDS
 All organizations exempt under IRC § 501(c) must make available
for public inspection at their headquarters (and any other office with
paid employees whose aggregate number of paid hours a week are
normally at least 120) their:
IRS Form 990s (and in the case of 501(c)(3) organizations,
also their Form 990-Ts) filed for the three most recent years,
their application for tax-exempt status (i.e., typically the Form
1023 or Form 1024) and all correspondence with and from
the IRS related thereto, and their IRS Determination Letter.
 Upon request of the public, such an organization must provide
copies of such materials the same day where the request is made
in person, and within thirty days where the request is made in
writing. Reasonable charges not greater than that allowed under
fee schedules promulgated under 5 USC 502(a)(4)(a)(i) (currently,
not greater than 20 cents per page) may be imposed for making
copies. IRC § 6104; IRS Reg § 301.6104(d)-1.
34
Requirements For Sound Operation of Tax-Exempt Entities
PERIODIC CORPORATE FILINGS
 Corporate Annual (or Periodic) Report
– look to the Non Profit Corporation Law of the state where
incorporated,
– and also if different than the state where incorporated, of any
state where you have an office, to determine any
requirements for annual or other periodic reports which
must be filed by domestic and foreign corporations.
– In most states, failure to file required periodic reports with
the state where incorporated will ultimately cause forfeiture
of the corporate charter, which in turn may expose directors
and officers who continue the business of the corporation
beyond the date of charter forfeiture, to personal liability for
debts incurred by the corporation thereafter.
35
Requirements For Sound Operation of Tax-Exempt Entities
LOBBYING REPORTS
 Federal Requirements – under the Lobbying
Disclosure Act at 2 U.S.C. § 1601, et seq.
– a chapter with at least one employee who (a)
makes more than one lobbying contact with a
covered government official; and (b) spends twenty
percent or more of his or her time during any
three-month period on “lobbying activities” on
behalf of that chapter must register with the
Secretary of the U.S. Senate and Clerk of the U.S.
House,
– unless the chapter incurs less than $11,500
(including salaries) on such lobbying activities
during such three-month period.
36
Requirements For Sound Operation of Tax-Exempt Entities
LOBBYING REPORTS (Cont.)
 Employment by a chapter of an outside
lobbyist will not require the chapter to register
under the federal lobbying law (but if the
chapter pays $3,000 or more to an outside
lobbyist during a three-month period, the
outside lobbyist must register and list the
chapter as a client).
 State and Local Lobbying Requirements - Note
also the potential applicability of state, or even
local lobbying registration requirements where
a chapter lobbies on state or local issues.
37
Requirements For Sound Operation of Tax-Exempt Entities
POLITICAL ACTION COMMITTEES
 Federal Requirements
– if a chapter has a political action committee which
supports candidates in federal elections, it must file its
Statement of Organization with the Federal Election
Commission (or, under certain circumstances, with the
Senate or House), and if the PAC supports a Presidential
candidate, then also with the appropriate state official
of the states where the President and PAC are
headquartered.
– Once registered, the PAC must file numerous periodic
reports with the Federal Election Commission, and copy
appropriate state officials in states of any supported
House or Senate candidates.
– Note, SHRM does NOT have a PAC
38
Requirements For Sound Operation of Tax-Exempt Entities
STATE PAC REQUIREMENTS
 A chapter which operates a
political action committee in
support of state or local
candidates will have to comply
with the applicable state and/or
local PAC registration and
reporting requirements.
39
Important Chapter Governance Policies – Key Elements
ANTITRUST POLICY
 Set forth general overview of applicable antitrust
laws and potential applicability to chapter
activities.
 Include unequivocal statement of policy of full
compliance.
 Address procedures to be followed by chapter to
comply with policy, including specifically
proscribed activities, such as price-fixing, division
of markets, etc.
 Address sanctions for violation of policy.
 A copy of SHRM Antitrust Compliance Policy can
be found in the SHRM Volunteer Resource Center
40
Important Chapter Governance Policies – Key Elements
PERSONNEL POLICY
 It is desirable to have a carefully drafted
personnel policy (although it is better to
have no written personnel policy at all, than
to have a badly written one).
 Essential elements of a good written
personnel policy include:
– If you are in “at-will” employment state, an
express statement that all employment by
chapter is “at-will” and that the personnel
policy does not constitute a contract.
41
Important Chapter Governance Policies – Key Elements
PERSONNEL POLICY (Cont.)
 Essential elements of a good written personnel policy (cont)
– Acknowledgment of Receipt Form – the employee should
sign a simple form acknowledging receipt of the personnel
policy and, if in an at-will state, his understanding that his
employment is “at-will” and that the personnel policy does
not constitute a contract.
– An unequivocal statement of your equal employment
opportunity policy.
– A statement of your “no harassment” policy. This policy
should prohibit not only sexual harassment, but also
harassment on any basis for which discrimination is
prohibited (e.g., race, color, religion, pregnancy, national
origin, age or disability).
– Drug and Alcohol Policy
42
Important Chapter Governance Policies – Key Elements
PERSONNEL POLICY (Cont.)
 Essential elements of a good written personnel
policy (cont)
– Family and Medical Leave Act Policy
– Timekeeping and Overtime
– E-mail/Internet/Voicemail Policy
– Creation of Intellectual Property - all intellectual
property contributed to or created by any
employee of chapter is owned by chapter.
– Employee Benefits, i.e., vacations, holidays,
insurance/pensions, leave of absence, jury duty,
military reserve leave, bereavement leave, sick
leave and personal leave.
43
Important Chapter Governance Policies – Key Elements
INTELLECTUAL PROPERTY
 A chapter should have a written intellectual property policy
which includes, at a minimum, the following elements:
– Obtain statement signed by each employee (as separate
statement or as part of personnel policy) acknowledging
chapter ownership of all intellectual property contributed to
or created by the employee during his employment by the
chapter.
– Obtain statement signed by all committee members and
board members confirming that all intellectual property
contributed to or created by them, when acting as a director
or committee member, is owned exclusively by the chapter.
See Attachment A hereto for an example of such a statement.
44
Important Chapter Governance Policies – Key Elements
INTELLECTUAL PROPERTY (Cont.)
 Include in exit interviews of all employees a
reminder of the chapter’s ownership of such
intellectual property.
 To the extent that you can so negotiate, include in
chapter contracts with contractors who create
intellectual property for the chapter, that the
chapter owns the resulting intellectual property.
 To the extent that you can so negotiate, obtain
written assignments from speakers and authors at
chapter events and publications, assigning
ownership of the speeches, articles and resulting
publications to chapter.
45
Important Chapter Governance Policies – Key Elements
INTELLECTUAL PROPERTY (Cont.)
 Membership List – treat and protect this list
as a proprietary asset of the chapter. The
list cannot be copyrighted, but it must be
treated as a trade secret. See Feist
Publications, Inc. v. Rural Telephone
Service Co., 499 U.S. 340(1991). When
you make a membership list available to
members, make them agree that the
chapter owns the list and that the
member’s use is by license from the
chapter.
46
Important Chapter Governance Policies – Key Elements
INTELLECTUAL PROPERTY (Cont.)
 Identify what types of marks and slogans should
be protected by trademark registrations, and
identify the chapter official whose advice should
be sought as to whether to register such marks
and/or slogans. DO NOT attempt to register any
mark with the “Society For Human Resource
Management” name, “SHRM acronym, or HR logo
in it.
 Place all registered trademarks on a diary so that
the chapter provides itself with advance notice for
any required continued use affidavits.
 Require use of trademark notice (®) whenever
using registered trademarks.
47
Important Chapter Governance Policies – Key Elements
INTELLECTUAL PROPERTY (Cont.)
 Set forth policy as to what types of
publications you will register for copyright.
 Require use of copyright notice on all
publications in which chapter claims
copyright.
 Require any users of chapter trademarks
and those who have the right to distribute
copyrighted chapter materials to sign a
written license agreement governing such
use.
48
Important Chapter Governance Policies – Key Elements
CONTRACTS POLICY – IMPORTANT ELEMENTS
 Identify the various types of contracts by ranges of dollar
amounts involved and/or by topic matter (e.g., intellectual
property contracts, hotel contracts, etc.), and for each type of
contract, identify:
– Whether the contract must be in writing.
– The officer(s), or employee(s), who must approve the
contract prior to it being signed.
– The officer(s), or employee(s), who will have authority to sign
such contract (keep number to a minimum)
 Identify an employee who shall be responsible for (i) seeing
that all written contracts are signed by both parties, (ii)
retaining an original copy of each contract signed by both
parties, and (iii) keeping a diary of important dates with
respect to each pending contract, such as dates by which
the chapter must give notice of intent not to renew.
49
Important Chapter Governance Policies – Key Elements
INSURANCE
 You should work with a knowledgeable
insurance broker and legal counsel to
identify all necessary and reasonably
affordable levels of insurance to be kept in
place by the chapter.
 A chapter officer or staff person should be
assigned responsibility to oversee
insurance matters, and a review of existing
insurance coverages should be placed on
the board of directors meeting agenda at
least once each year.
50
Attachment A to Henry A. Hart July 19, 2012 Webcast
COMMITTEE AND BOARD MEMBER CONFIRMATION OF
ASSOCIATION INTELLECTUAL PROPERTY OWNERSHIP
ASSOCIATION BOARD OF DIRECTORS 
ASSOCIATION COMMITTEE:
(Insert Name of Committee)
In consideration for the opportunity to work on the Board Of Directors or
the above-referenced Committee, the undersigned ASSOCIATION
Director or Committee Member hereby confirms that all work which
he/she performs in connection with any projects of the Board Of
Directors or above-referenced committee is being performed for the
benefit of ASSOCIATION and that any copyright materials and other
intellectual property which he/she may produce, generate or otherwise
contribute to in any way in connection with any such ASSOCIATION
project (collectively, the "Intellectual Property") are to be exclusively
owned by ASSOCIATION. Nevertheless, in the event that the
undersigned is deemed to have any ownership interest in any such
Intellectual Property, the undersigned hereby conveys any such
interest to ASSOCIATION.
51
QUESTIONS??
On
Requirements For Sound
Operation of Tax-Exempt Entities
Or
Important Chapter Governance
Policies – Key Elements
52