Ask Experts Questions for FREE Help !
Ask
    kwscott3's Avatar
    kwscott3 Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Sep 20, 2010, 10:10 AM
    Can financial advisor be board member?
    Can a foundation's investment portfolio be managed at a firm where a baord member or director is employed? What is that board member/director is a daughter of person who set up the 501c3?
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
    		  
    #2

    Sep 20, 2010, 10:27 AM

    There is a potential for conflict of interest, so hopefully the full board is aware of the situation and has approved it. At the very least the board member should recuse himself from any votes having to do with hiring or paying the investment firm. He should also make it clear to the board that he does not receive any compensation from his company for them having won the foundation's business. And I would recommend that the board review its policy regarding possible conflicts of interest of board members, and make sure that it is explicit about this kind of issue. The fact that the board member is a relative of a founder is immaterial.
    kwscott3's Avatar
    kwscott3 Posts: 3, Reputation: 1
    New Member
    		  
    #3

    Sep 20, 2010, 11:13 AM
    Comment on ebaines's post
    Thank you for your response. I have been researching self dealing law regarding private foundations and have seen that there is a self-dealing exception for resonable compensation to a disqualified person providing a professional service.
    kwscott3's Avatar
    kwscott3 Posts: 3, Reputation: 1
    New Member
    		  
    #4

    Sep 20, 2010, 11:16 AM
    Comment on ebaines's post
    Such as an accountant (who sits on the board or is a family member)providing advice and services and reaceiving reasonable fees for that service. I think investment management services would be similar situation as long as fees charged are low
    JudyKayTee's Avatar
    JudyKayTee Posts: 46,503, Reputation: 4600
    Uber Member
    		  
    #5

    Sep 20, 2010, 12:38 PM

    Please use the quick reply box to answer and NOT the comments feature - as explained in AMHD rules.

    Your comments are not brought to anyone's attention.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

My financial advisor has ripped me off I need lawyer [ 2 Answers ]

I am 56 years old . I have been through 5 financial advisors . Everyone of them has lied to me . At present I have lost over 200 thousand dollars because of there lying These so called professionals have lied manipulated and tricked me into investing my money with them . The last one got me for...

HOA Board Member Moves with board property [ 3 Answers ]

Hello, I am currently an HOA Board President. One of the board members (secretary) moved out of the community in the dark of night and abandoned his home. He took with him important documents mainly all board minute’s in addition or board seal. We have called, emailed and texted only to get no...

Accounting entries for interim billing from financial advisor [ 1 Answers ]

Hi, I am an accounts assistant and would like to ask if anybody would know how to record the following transaction. For professional services to be rendered by a financial advisor. The terms of agreement are that fees will be fixed at $160,000 plus out of pocket expenses and applicable...

View more questions Search