What is Fiduciary Duty Questce que Lobligation Fiduciaire

1
What is Fiduciary Duty?Quest-ce que
Lobligation Fiduciaire?

• Relationship of confidence and trust
• Must not put personal interest before your duty

2
Two Types of Fiduciary Duty Two Types
Dobligations Fiduciaires

• Duty to act with care (diligence and skill)
• Duty to act with loyalty (honesty and good faith)

3
Non-Sport ExamplesExemples Non Sportif

• Trust fund gatekeeper to wealth
• Community foundation board member (As an Board
  Member, you are representing your community as
  well as the interests of sport and recreation)

4
Fulfilling Your Duties Sacquitter de ses
Obligations

• Be prepared and do your homework
• Be knowledgeable
• Know the bylaws
• Know what your athletes want
• Know your organization is prepared
• Encourage other board members to be prepared and
  informed
• LISTEN AND HEAR

5
Not Fulfilling DutiesNe Pas Sacquitter de ses
Obligations

• Could results in
• Lawsuit(s)
• Loss of credibility (loss of funding)
• Organizational inefficiency
• Becoming demoralized
• Loss of trust (individual)

6
Actual Conflict of Interest DefinitionConflit
Dintérêt Réel - Définition

• An actual conflict of interest exists when a
  person does, in fact, favour one side over
  another in their decision-making due to the
  potential for personal gain.

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Actual Conflict of Interest - Example Conflit
Dintérêt Réel Exemple

• When a national coach is a parent of an athlete
  on the national team

8
Perceived Conflict of Interest -
DefinitionConflit Dintérêt Perçu - Définition

• A perceived conflict of interest has to do
  with appearances and perceptions and does not
  depend on whether a person would, in fact, be
  conflicted and thus unable to make a decision
  fairly

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Perceived Conflict of Interest - Example Conflit
Dintérêt Perçu - Exemple

• An Athlete Representative is involved in the
  development of the team selection criteria

10
Avoiding a Conflict Example One Éviter un
Conflit Exemple Une

• Self-Policing and Disclosure
• Defer responsibilities to a third party
• Disclose past and present affiliations that may
  cause a conflict of interest prior to Board
  membership

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Avoiding a Conflict Example TwoÉviter un
Conflit Exemple Deux

• Policy in place
• Defines conflict of interest
• Outlines procedure to address any conflicts that
  may occur
• Mitigates hard feelings between individual Board
  members

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Avoiding a Conflict Example Three Éviter un
Conflit Exemple Trois

• Third party consultation
• Athletes Council
• Equal representation between all athletes across
  multiple disciplines
• Keep groups needs in mind
• Avoid personal bias

13
Managing a Conflict of InterestGérer un Conflit
Dintérêt

• Identify and agree on conflict
• Set clear rules and expectations
• If the situation arises, the person is excluded
  from discussion and voting

14
Managing a Conflict of Interest - Example
OneGérer un Conflit Dintérêt - Exemple Un

• Manitoba Lotteries employees cannot play at ANY
  casino in Manitoba (VLTs included) because they
  know the inner workings of the system

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Managing a Conflict of Interest - Example
TwoGérer un Conflit Dintérêt Exemple Deux

• Working on the board while family members are
  coaches/athletes within the same discipline
• Working as the advisor on the board while
  receiving financial gains from the athletes who
  make the team (from being a coach and judge)

16
What is a Financial Report? Quest-ce quun
Rapport Financier?

• The formal records of the financial
• activities of a business, person or
• other entity. (www.wikipedia.com)

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What Should the Financial Report Include?Que
Devrait un Rapport Financier Contenir?

• 1. Balance Sheet
• Snapshot in time of assets and liabilities
• 2. Income Statement
• Revenues and expenses throughout the year
• 3. Statement of Retained Earnings

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What Should the Financial Report Include? (Cont)
Que Devrait un Rapport Financier Contenir?

• 4. Statement of Cash Flows
• Physical cash flow going into and out of the
  company from its day-to-day activities
• 5. Notes to the financial statements
• 6. A comparison to the previous period

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Red FlagsSignal Dalarme

• Big (unexplained) year-to-year changes on
  financial statement items (increases or deficits)
• Shrinking stakeholders equity
• Frequent change in auditors or not audited
• Significant difference between statement of cash
  flows and changes on the income statement

20
What is an Audit?Quest-ce quun Audit?

• An evaluation of a person, organization, system,
  process, enterprise, project or product
• Une évaluation d'une personne, organisation,
  système, processus, entreprise, projet ou un
  produit
• An audit is a vital part of accounting

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How Often is it Needed?Quelle est sa Fréquence?

• Annually or if questions arise
• Two basic types
• Internal auditors of internal control maintain
  independence by presenting their reports
  directly to the Board of Directors or to top
  management
• External auditors are independent staff assigned
  by an auditing firm to assess and evaluate
  financial statements of their clients or to
  perform other agreed-upon evaluations

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Why is it Necessary? Pourquoi est-il Nécessaire?

• Audits are performed to ascertain the validity
  and reliability of information also to provide
  an assessment of a system's internal control
• An audit seeks to provide only reasonable
  assurance that the statements are free from
  material error

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Who Conducts the Audit? Qui Effectue un Audit?

• Auditing firms
• Board members (non-baised)
• Government
• Police

24
What Kind of Insurance do Board Members Need? De
Quel Type Dassurance les Administrateurs ont-ils
Besoin?

• Directors and Officers Liability Insurance
• Commercial General Liability
• Errors and Omissions Insurance

25
How Much Insurance Should an NSO Carry?Quelle
Devrait être la Couverture Dassurance dun ONS?

• From 1 to 5 million dollars (minimum)
• Related to the size and budget of the
  organization
• De 1 à 5 million minimum
• Dépend de la taille de lorganisation, et de son
  budget

26
How Can You Find Information? Comment Trouver
les Informations?

• Ask the Executive Director
• Refer to resources from Centre for Sport and Law
  and/or Sport Solution

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Indemnity - DefinitionIndemnité - Définition

• Protection, as by insurance, from liabilities
  or penalties incurred by ones actions

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How Indemnity Relates to an NSO Lien Entre
Indemnité et ONS

• NSOs approve all decisions and take legal
  responsibility for those decisions

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Personal Liability Two ExamplesResponsabilité
Personnelle Deux Exemples

• Selection criteria that doesnt allow for an
  appeal process
• Employment termination without due process
  (Termination demploi sans proces neccessaire)