ONTARIO DISC SPORTS ASSOCIATION

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ONTARIO DISC SPORTS ASSOCIATION

• INCORPORATION, LIABILITY and GOOD GOVERANCE

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NATURE OF A CORPORATION

• An Artificial Person
• A legal entity
• Separate and distinct in law from its members
• Perpetual

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OWNERSHIP

• Shareholders/Members own the Corporation through
  their membership/shares of the Corporation.
• Shareholders/Members do not own business or the
  property belonging to the corporation.
• Not-for-profit corporation may not be operated
  for gain of its members, directors or officers.
  (Directors may receive reasonable remuneration
  and expenses for acting as a director)

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Should You Incorporate?

• Advantages
• Separate Legal Entity
• Carry on business
• Sue and be sued
• No personal liability (debts, lawsuits)
• Perpetual
• Corporate Shield
• Buy, Sell, Mortgage Property
• Borrow Money
• Enter Contracts and Leases
• Employ Persons

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Should You Incorporate?

• Disadvantages
• Initial Filing Fee
• Supervision by the Government
• Administrative Requirements
• Minutes
• Financial Statements
• Affairs in accordance with the Corporations Act
• Audits
• Elections
• Calling of Meetings
• Bylaws

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Corporations Act Requirements

• Head Office ? Situated in Ontario
• Directors ? No fewer than 3
• Annual Meeting ?Every 15 months
• Election of Directors ?Election or by virtue of
  office.
• Quorum ? BOD not less than two fifths.
• Audit ? Mandatory unless revenue less than
  100,000 and all members consent.

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Record Keeping Requirements

• Proper Books of accounts and accounting records
• Minutes of meeting of members and directors
• Maintain copies of the Letters Patent, Bylaws and
  Resolutions
• Register of its Members and Directors

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WHAT IS A DIRECTOR?

• An individual who is a member of the governing
  board of an organization
• Responsible for overseeing the operation of the
  organization on behalf of its members
• Have a relationship of trust with the members,
  from which arise legal duties
• Manage and supervise the affairs of the
  organization.
• Exercise all of the Powers of the organization.

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LEGAL DUTIES OF DIRECTORS

• Diligence ? to act honestly, reasonably,
  prudently, in good faith and with a view to the
  best interests of the organization and as a
  reasonably prudent person.
• Loyalty ? to not use ones position as a director
  to further private interests
• Obedience ? to act within the governing bylaws
  and within the laws and rules that apply to the
  organization

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Disclosure of Interests

• Every director must declare any indirect or
  direct interest in in a proposed contract
  (Section 71.(1)) at a meeting of directors.
• Disclosure must be immediate and in writing.

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Conflict of Interest

• Conflict of Interest A real or seeming
  incompatibility between ones private interests
  and ones fiduciary duties.
• Pecuniary Interest - An interest that an
  individual may have in a matter because of the
  reasonable likelihood or expectation of financial
  gain or loss for that individual, or another
  person with whom that individual is associated.
• Non-Pecuniary Interest - Family relationships,
  friendships, volunteer positions in organizations
  or other interests that do not involve the
  potential for financial gain or loss.
• Perceived Conflict of Interest A perception
  by an informed person that a conflict of interest
  exists or may exist.

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Indemnity of Directors

• Indemnity - To restore someone to the same
  financial position as before
• Section 80
• Upon consent of the organization, directors may
  be indemnified out of the funds of the
  organization from costs, charges and expenses
  related to any action or law suit.
• The director acted honestly and in good faith, in
  the best interests of the organization.
• Reasonable grounds to believe the conduct was
  lawful.
• Directors may be personally liable for unpaid
  employment wages.

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Protecting Yourself as a Director

• Understand the mission of the organization.
• Commit to doing the job well.
• Ask for a written job description.
• Educate yourself about your legal duties.
• Ensure the board can govern effectively and
  provide competent direction.
• Confirm the organization indemnifies its
  directors and carries directors liability
  insurance.
• Disclose any real or perceived conflict of
  interests and ensure it is recorded in the
  meeting minutes.
• Ensure all decisions are not rushed and proper
  materials are received and reviewed.

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Protecting Yourself as a Director

• Review regularly the financial reports and
  budgets.
• Know who is authorized to sign cheques.
• Ensure contracts entered into are reviewed.
• Have a copy of the organizations policy manual.
• Be familiar with the organizations constitution
  and bylaws.
• Support professional development.

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PERFORMANCE EXPECTATIONS OF BOARD MEMBERS

• Give ample notice, with reasons, if you are
  unable to attend a meeting
• Everything that you would like to present to the
  Board, put in writing
• Read minutes before the meeting, identify errors,
  and note actions that were to be followed up
• Develop a working knowledge of meeting procedures
• Keep delicate matters confidential
• Participate in the maintenance of friendly,
  positive working relationships
• Speak positively of the organization to the
  public
• Disclose any conflicts

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Good Governance

• ONTARIO DISC SPORTS ASSOCIATION

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GOVERNING DOCUMENTS

• Give the sport organization
• Structure
• Power
• Methods by which it governs or rules itself

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SPORT ORGANIZATIONS RUN INTO TROUBLE WHEN

• They do not set out rules policies or
  procedures to deal with something
• They set out rules policies but they are
  incomplete, vague or contradictory
• They set out rules policies but then choose not
  to follow them
• They have rules policies that do not fit with
  their culture or their resources

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POLICIES ARE YOUR BEST FRIEND

• They provide you with a guide for your actions
• They help you to avoid a problem or crisis
• In the event you cannot avoid a problem or a
  crisis, they will help you to act uniformly,
  consistently and fairly in how you manage your
  problem or crisis

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STRUCTURE PROCESS

• Corporations Act
• Constitution (Purposes)
• By-laws
• Key Governance Policies
• Other Policies

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BYLAWS

• Bylaws are the foundation of the private
  organizations contract with its members.
• This contract provides the legal authority to
  establish and enforce the rights, privileges and
  obligations of membership.

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POWERS OF THE BOARD

• Except as otherwise provided in the Act or this
  bylaw, the Board has the powers of the
  Association and may delegate any of its powers,
  duties and functions. Without limiting the
  generality of the foregoing
• a) The Board may make policies, procedures and
  regulations for managing the affairs of the
  Association in accordance with the Act and this
  bylaw
• b) The Board may make policies, procedures and
  regulations relating to the discipline of
  members, and shall have the authority to
  discipline members accordingly (continued)

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POWERS OF THE BOARD (contd)

• d) The Board may establish committees to assist
  in performing the work of the Association, and
  may delegate authority to committees
• e) The Board may employ such persons as it deems
  necessary to carry out the work of the
  Association

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KEY GOVERNANCE POLICIES

• Selection -gt award benefits in sport
• Conduct, Discipline, Harassment -gt revoke
  benefits of sport
• Appeals, Mediation, Arbitration -gt disputes over
  allocation of benefits
• Personnel -gt employees, volunteers, contractors
• Conflict of interest -gt statutory requirements
• Privacy -- gt protects personal information

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• For many sport organizations, it is a sobering
  lesson to learn that policy is whats written on
  the paper and not whats in the mind of the
  drafters of the policy, or in the collective
  memory of the organization
• Your Risk Management Program
• A Handbook for Sport Organizations, 1998

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POLICY WRITING

• Be clear! - Show your policy to an outsider to
  see if they understand it
• Be concise! Do not use three words when one
  will do
• Be consistent! - in your use of terms
• Be friendly to your reader! - make ample use of
  headings, subheadings, bullets

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POLICY TEMPLATE

• 1. Statement of purpose of the policy
• 2. Scope and application of the policy (what and
  whom does the policy apply to?)
• 3. Exclusions from the policy (what does the
  policy not apply to? - just to be safe!)
• 4. Policy scheme (who does what, when, how)

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SELECTION - WHAT SHOULD BE IN POLICY

• Purpose (selection of what, for what)
• Goals for selection
• Authority for selection
• Criteria to be eligible to be considered for
  selection
• Criteria to be selected
• Process for selection

• Timeline for selection
• Exceptions to selection policy
• Dealing with unexpected circumstances
• Criteria to remain selected
• Who will make selections
• Appeal

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WHAT SHOULD BE IN A CODE OF CONDUCT

• A statement of the organizations values, beliefs
  and expectations of members and participants.
  This is usually a positive statement.

• The standard of behavior which is expected is
  further defined by giving examples of conduct
  which breaches that standard. This is usually a
  series of negative statements.

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WHAT SHOULD BE IN DISCIPLINE POLICY

• Purpose
• Application
• Reporting an infraction/making a complaint
• Minor v. Major infractions
• Investigation Discipline Panel
• Preliminary meeting

• Hearing
• Decision as to whether there is a breach
• Sanctions in the event there is a breach
• Serious infractions and automatic sanctions
• Confidentiality
• Appeal

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PROCEDURAL FAIRNESS

• 1. Authority - authority to make a decision has
  been delegated to the decision-maker
• 2. Right to a hearing - the person affected has
  a reasonable opportunity to present his case
• 3. Rule against bias - the decision-maker
  listens fairly to both sides to reach a decision
  untainted by bias

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FAIRNESS

• The content of fairness is not the same in
  every situation. It is a spectrum that depends on
  the seriousness of the sanction and the impact on
  the individual.

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APPEAL POLICY

• What may be appealed
• Grounds for appeal
• Who does what when
• Scope of authority of decision-makers
• Arbitration

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Sound policies lead to informed and transparent
decision-making and such decision-making results
in improved management of time, resources,
disputes and risk exposures. Together, these are
the hallmarks of good governance.
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SOME THINGS WEVE LEARNED

• It is definitely better to have policy than to
  not have it
• The law should remain stable but must not stand
  still
• The law expects you to have policies and does not
  relieve you of this responsibility because youre
  non-profit, because youre small, because you
  dont have the resources, because you dont have
  time, because .

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Steven Indig sji_at_sportlaw.ca 905-482-8987 www.spor
tlaw.ca