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Independent Board Members

ECFA Standard 2 requires the governing boards of ECFA-accredited organizations to be comprised of a majority of individuals that are other than employees/staff and/or related by blood or marriage. A majority of independent board members helps to ensure that official board action will be carried out without partiality or conflict of interest.

ECFA defines independent board members as:

  1. Persons who are not employees or staff members of the organization.
  2. Persons who may not individually dictate the operations of the organization similar to an employee or staff member. A person who is an uncompensated CEO, for instance, is not independent.
  3. Persons who are not related by blood or marriage to staff members or other board members. Blood or marriage relationships are defined for the purposes of the standard as being his or her spouse, ancestors, brothers and sisters (whether whole- or half-blood), children (whether natural or adopted), grandchildren, great-grandchildren, and spouses of brothers, sisters, children, grandchildren, and great-grandchildren.
  4. Persons who do not report to, or are not subordinate to, employees or staff members of the organization.
  5. Persons who do not report to, or are not subordinate to, other board members.
  6. Persons who do not receive a significant amount for consulting or speaking, or any other remuneration from the organization.
  7. Persons who do not have relationships with firms that have significant financial dealings with the organization, officers, directors or key employees.
  8. Persons who are not the paid legal counsel, related by blood or marriage to the paid legal counsel (see definition of blood or marriage in #3 above), or are employed by the firm that is the paid legal counsel of the organization.
  9. Persons who are not the auditors, related by blood or marriage to the auditors (see definition of blood or marriage in #3 above), or are employed by the auditing firm of the organization.

(Note: Church membership does not disqualify an individual that is otherwise an independent board member.)

ECFA also requires that organizational boards consist of at least five individuals. This helps to prevent a “clannish” group from controlling the organization and also provides adequate policy guidance in carrying out the necessary responsibilities of the ministry.

See the Commentary to ECFA Standard 2 for further details on the need for responsible board governance.

 


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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