During the 2011 Risk Management and Finance Summit for Nonprofits, Eileen Morgan Johnson of Whiteford, Taylor & Preston LLP discussed the risks of nonprofit mergers and separations. The NonProfit Times was in attendance for their tips, which included the following:
- Periodically review governing documents.
- If a potential conflict can't be avoided, make sure it is disclosed.
- Don't be afraid to request a legal opinion when the issue warrants it.
- Seek the advice of independent experts.
- Insist on thorough documentation. This includes board minutes showing discussion and reports, memoranda and other documents considered in decision making.
- Keep your employees informed of all new merger developments and provide ample opportunity for their feedback. Nobody likes being kept in the dark.
- Make sure that your fellow directors get copies of all proposed agreements or summaries.
- Demand that board minutes accurately reflect votes.