A Director by Any Other Name
Duties of Board and Committee Members of Religious Institutions
Depending on the structure of a religious institution, its governors may carry different titles (for example, board of directors, committee members, council members, elders, trustees, etc).
However, no matter which name they bear or what structure of entity they govern, a religious institution’s governors bear duties which they must property discharge.
These obligations may spring from statute, but are underpinned by common law principles and may be enforced at common law. An examination of the various sources of the duties reveals four broad duties that generally apply to governors across all charitable entities regardless of structure (perhaps only with the exception os some unincorporated associations), and regardless of whether the governors are called ‘Directors’ or another name:
- Duty of care, skill and diligence;
- Duty of good faith and proper purpose;
- Duty to avoid conflicts of interest; and
- Duty not to improperly use position or information.
Our practice in this area of law indicates that whilst many religious institutions have been managed with high attention to development of good governance culture for many years, conversely some religious institutions (and particularly those which are unincorporated in their structure) may have allowed governance concerns to perpetually go unaddressed. In particular, the following attitudes have at times appeared (although, thankfully, very rarely in recent years):
- A belief that governors following God’s calling for the institution will be afforded God’s protection;
- A belief that governors acting on a volunteer basis will not be called to account over governance matters.