25W Mgmt 108 Lec 3:13

Final Class Overview

• Welcome & Encouragement

  • Teacher expresses excitement for the final class.

  • Encourages students to keep in touch and seek advice when needed.

  • Wishes success for everyone, hoping for good exam results.

• Agenda for the Class

  • Continuing discussion from previous classes focusing on:

    • Corporations

    • S Corporations

  • Reminder to check the brewing site for final exam details.

Board of Directors Responsibilities

• Recap on Board Functions

  • The board makes important decisions while meeting regularly (monthly or quarterly).

  • Delegation of day-to-day decision-making to officers and employees.

• Decision-Making Example

  • Hypothetical scenario involving a board of 7 members discussing a lease for an office in Arizona.

    • Importance of having discussions with all members for informed decision.

    • Decision not valid if not every member has a chance to express their opinion.

Importance of Group Decisions

• Collective Input

  • Everyone on a board adds unique insights that might alter the final decision.

  • All members must have an opportunity to voice opinions to avoid ethical concerns.

• Key Principles

  • Demonstrates that the board’s decision must be inclusive.

  • Example draws on the movie 12 Angry Men where group deliberation is pivotal.

Meeting Protocols and Quorum**

• Types of Meetings

  • Regular Meetings: Scheduled meetings as outlined in the bylaws.

  • Special Meetings: Held as needed when urgent issues arise, requiring notice and agenda communication.

• Voting and Quorum Requirements

  • Majority needed to start meeting and make decisions.

  • Discussions around how many members need to be present for a valid action.

• Voting Rules

  • Each member has one vote; proxies are not accepted.

  • Must document discussions in a minute book for transparency.

Actions and Authority of the Board

• Decisions Documentation

  • Meeting minutes should reflect all discussions, member votes, and outcomes.

  • Unanimous written consent can bypass meetings if all members agree.

Example Scenarios with Board Decisions

• Practical Applications of Rules

  • Discussed scenarios where boards must confirm legitimacy of actions based on quorum and decision-making rules.

  • Ongoing examples of interactions between directors during decision-making scenarios.

Corporate Structures and Entity Types

• Business Entity Overview

  • Differences explained between corporations, LLCs, and other business forms.

  • Pros and cons of S corporations.

• Benefits of LLCs

  • Combines limited liability with single taxation.

  • Appeals for entrepreneurs needing flexible structures.

Nonprofit Organizations

• Overview of Nonprofits

  • Nonprofits can make profits but must serve public interest without profit-driven motives.

  • Understanding tax exclusions for specific nonprofit entities (501c3, etc.).

• Funding and Revenue Sources

  • Discussion about individuals vs. corporations as primary donors.

  • Clarification on how nonprofits can operate with both operational income and donations.

Salary Structures for Nonprofit Executives

• Compensation Guidelines

  • Nonprofit executives can earn competitive salaries based on their job roles and duties.

  • Limitations on salaries to prevent exploitation of nonprofit status.

• Ethical Considerations

  • Concerns raised about perceived inequities in nonprofit salaries vs. for-profit sectors.

Summary of Key Concepts

• Legal Implications for Corporations and Nonprofits

  • Board responsibilities and the importance of adherence to governance rules.

  • The significance of accurately documenting and following through on decisions made at meetings.

  • The role of the board in ensuring diverse perspectives are represented.

Questions and Closing Remarks

• Engagement and Participation

  • Teacher encourages students to ask questions, clarifying that learning is a collaborative process.

  • Invitation to seek additional help or clarification as needed.