Frequently Asked Questions
What are the fiduciary duties of an educational institution's board members?
The fiduciary duties of an educational institution's board members are crucial to the successful operation of the institution. These duties, which include care, loyalty, and obedience, require board members to make decisions in good faith that align with the institution's mission and are free from undue influence. The duty of care requires board members to perform their responsibilities with the diligence and skill of an ordinarily prudent person in a similar position. The duty of loyalty mandates that board members prioritize the institution's interests over personal or other interests. The duty of obedience ensures that the institution operates in a manner that furthers its stated purpose and complies with all relevant statutes and regulations. In a corporate setting, the board of directors also has fiduciary duties, which include conducting themselves in a manner that they believe is in the best interest of the business. They must exercise due care in managing the corporation's affairs and demonstrate loyalty and obedience to the corporation. Board members in non-profit organizations, like educational institutions, are also considered fiduciaries. They are legally responsible for managing the nonprofit's assets and must make important decisions regarding the appointment and recruitment of new board members, hiring and firing of managers and staff, conducting annual audits, and monitoring financial reports.
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