Understanding Fiduciary Duty
As a PTA board member you have a legal fiduciary duty to act in the best interests of your PTA.
You are considered a fiduciary because you are legally responsible for managing a nonprofit entity’s assets. Not understanding your fiduciary duty or not being well-informed about them doesn’t relieve an elected officer from any obligations or liabilities they may face if they fail to fulfill these important duties. The three fiduciary duties you are responsible for adhering to are the duties of care, obedience, and loyalty.
Duty of Care
Give the same care and concern to your board responsibilities as any prudent and ordinary person would.
- Board members do no harm. They protect PTA assets, including the PTA’s name and reputation.
- Board members follow the “Prudent Person Rule”– what would a prudent person do in this situation?
- Board members advocate for and participate in their PTA’s work.
- Board members act in good faith using their best judgement and base decisions and actions on what is in the best interest of PTA.
- Board members attend meetings, participate, educate themselves on issues, research, discuss, and stay informed
Duty of Obedience
Adhere to all applicable laws, regulations, and bylaws, and remain a guardian of the mission, brand and association
- Board members know and obey applicable state and federal laws.
- Board members follow their PTA bylaws, standing rules, and policies.
- Board members keep their PTA in good standing by abiding by Virginia PTA’s Standards of Affiliation.
- Board members are faithful to PTA’s mission, using the mission as the foundation of decision-making.
Duty of Loyalty
Place the interests of the association before personal and professional interests and publicly disclose any conflicts of interests.
- When making PTA decisions, board members place their PTA’s interests over those of individuals, including family and friends.
- Board members maintain confidentiality about sensitive PTA issues and information and allow a safe atmosphere for decision making.
- Board members disclose all potential conflicts of interest and do not personally gain from board participation.
