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New Leadership Orientation

From the October 2022 newsletter edition.
Category: Governance

All organizations undergo leadership turnover. It is important to ensure that new church directors and leaders are fully equipped to be successful in their roles. The process of training new leaders is often called orientation. Orientation is a program where new directors, officers and management figures undergo an introduction to their roles in the organization. These leaders must become familiar with the church and their official roles. Here, we will explore some guidelines to help…

Avoiding Insider Church Lawsuits

From the October 2022 newsletter edition.
Category: Risk Management

Recently, we have received a spate of calls from potential clients dealing with internal quarrels. In most of these instances, church members are fighting one another over control of the church’s assets, ministries, and practices. The issues include spiritual and secular disagreements. These cases are often emotional, complicated, and expensive for the clients. When church disputes wind up in court, lines are drawn, lawyers file competing motions, and the public peers into family business. This…

What Makes An Effective Board Chair?

From the October 2022 newsletter edition.
Category: Governance

Good corporate governance begins at the top. For most organizations, the top is defined as the Board of Directors. Atop the board is the presiding officer. The presiding officer for the board is often called the chairman, chairperson, or chair. Some churches use different titles such as president, pastor, elder, or deacon. The governing board may also go by different names as well. Consistent with effective board leadership is the presence of a competent chair….

The Right Level of Church Capital

From the July 2022 newsletter edition.
Category: Governance

Most leaders face the question of capital adequacy for their institutions. Having insufficient capital can empower or handicap an organization’s plans. This is a conversation around the amount of reserves a church should have on hand. In this article, we share a governance perspective on the dialog around capital. Capital is the church’s savings account for a rainy day. Capital is important because it provides a financial cushion for future perils. Officials who focus on…

M&A Strategy For Churches

From the July 2022 newsletter edition.
Category: Governance

It is not uncommon to see for-profit companies use a merger and acquisition (M&A) strategy to grow. These corporations believe combining their organizations with another can lead to greater profits and market share. It might seem unusual to think about churches in the manner of M&A activity. While not typical, church leaders have a responsibility to consider all possible strategies to improve their corporate performance. In the October 2019 edition of Legal Counsel for Churches,…

Private Emails May Become Public Evidence

From the July 2022 newsletter edition.
Category: Risk Management

It can be a nightmare scenario when an embarrassing internal email among church officials become public. This situation is made worst when the threat of a lawsuit is underway. Emails can be an effective way to communicate. Emails often improve efficiency among parties. Used the wrong way, emails can become a liability. Emails often do not give the receiver the insight of any off-line facts surrounding the message. The nuances of emotions and body language…

Board Rotation Is Good Practice

From the April 2022 newsletter edition.
Category: Governance

One of the signs that an organization is ripe for underperformance is the stagnation of its board. A healthy board accepts the idea that rotation of its directors is good for its growth. In this article, we will explore why turnover can be an important governance strategy. All organizations go through turnover of its officers. People leave for various reasons. In some instances, officers leave for voluntary choices. There are also occasions when board members…

The Importance Of Recording Dissenting Votes

From the April 2022 newsletter edition.
Category: Governance

A Lesson On The Duty Of Loyalty Church board members are generally not held personally responsible for the business decisions they make on behalf of the institution. This is one of the advantages of serving a corporation or an organization that has separate legal recognition. The protection from personal liability comes with strings attached. Directors are expected to uphold their fiduciary duties and act as any prudent corporate officer would under the circumstances. For the…

Corporate Governance Tips From The IRS

From the April 2022 newsletter edition.
Category: Governance

Corporate governance is a vital duty for church leaders. Effective governance protects the church and its officers. Most organizations recognized under the 501(c)(3) law must file a tax return. The tax return form is called Form 990, Return of Organization Exempt from Income Tax. The Form 990 calls for reporting on the organization’s financials, accounting methods, property, activities, vendors, and compliance. For the purposes of this article, we focus on the governance and management section…

How To Avoid A Church Failure

From the January 2022 newsletter edition.
Category: Risk Management

Churches are vulnerable to the same risks as other organizations. When negative conditions occur, churches can become unsuccessful. As leaders, you have a responsibility to the ministry to make strategic decisions that avoid failure. When a church fails, this is a moment for sorrow. It may feel personally painful for church leaders to admit that their work in the ministry fell short. Failure can also be a painful episode for a congregation. We believe it…

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