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Seal of Accountability

CCCC Standards of Accountability

Standard 2: An Independent Active Governing Board

The organization shall have an active governing board of at least five members which holds meetings at least twice a year at which the agenda is not restricted to a specific issue or issues (e.g. to the appointment of officers).

  • A quorum for a meeting shall be at least a majority of the authorized number of the governing board members.
  • The majority of the members of the governing board shall reside in Canada.
  • No member of the governing board shall be entitled to receive, either directly or indirectly, any salary, wages, fees, commissions or other amount for services rendered to the organization.
  • A majority of the governing board members must be at arm’s length to each other and to the executive director.
  • Each member of the governing board shall act in the best interest of the organization and shall not be controlled or restricted by any external entity or interest group that may have elected or appointed the individual to such governing board.
  • There shall not be fewer voting members of the organization than members of the governing board.

Commentary

The word "Executive Director" means the one most senior employee (whether paid or volunteer) who is appointed by the governing board and is solely accountable to the governing board. Other common titles include Pastor, President and CEO.

"Arm’s length" is as defined in the Income Tax Act (Canada) and generally means not connected by blood relationship, marriage or adoption.

Related to bullet 4, if in a governing board of 8 persons there were 2 married couples, a majority would not be at arm’s length (i.e. 4 of 8 board members not at arm’s length). Similarly, if in a board of 8 persons there was 1 married couple and their son and the Executive Director was a grandchild of another person on the governing board, a majority would not be at arm’s length (i.e. 4 of 8 board members not at arm’s length). But, for example, if there were three brothers on the board and no one was related to anyone else, then a majority would be at arm’s length (i.e. 3 of 8 board members not at arm’s length).

Public entities, including registered charities, are required by law to have an independent board of trustees or directors. Standard #2 determines that, to be effective, the board of trustees or directors of a Christian ministry:

  1. Must be active. The board must convene a minimum of two regular business meetings annually.
  2. Must be of reasonable size. A minimum of five members is considered necessary to permit the board to function effectively. However, the number of board members should not become so large that the board becomes ineffective.
  3. Must limit the number of family relationships among directors, and between directors and officers. Directors so related must be in the minority to ensure the board's objectivity, both in appearance and in fact.
  4. Must not provide remuneration or benefit of any kind to a board member for services rendered to the organization. (Two exceptions are allowed; one to those organizations constituted by a Special Act of the provincial or federal legislature which specifically requires otherwise, as is the case for Presidents of some universities, and two; Universities accredited with the AUCC where a faculty member is required to be appointed to the board.) This does not, of course, preclude reimbursement for expenses. Where the spouse of a director is employed by the organization, the remuneration paid to the spouse is an indirect benefit to the director and in contravention of the standard. Bylaws may provide for ex-officio, non-voting members (including employees), but their number must not exceed 20% of the number of directors.
  5. Must not be accountable for the exercise of the board's powers and authority to the board of another organization. A member of the board, if appointed by another organization, must always act in the best interests of the charity of which he or she is a director. The board member is not a delegate of another organization and must not act as such. A member of the board of a charity must not only be, but must appear to be, above reproach in all his dealings with the organization. No real or perceived conflict of interest should exist.

Note: When the amount paid to a firm or company for a service or product provided by a director does not have an impact on the director’s income, it will be considered compliance. A member charity doing business with the bank branch where the branch manager is on the board or buying insurance from a company where an employee of the insurance company (not the commissioned salesperson) sits on the board are examples of situations that would be considered complying with the standard.

Click here to view CCCC's policy on employees on the board.

Smiling People
 

"Going through the rigour of getting the seal and maintaining the seal and looking at the standards is immensely helpful."

- Malcolm Burrows,
Scotia Private Client Care