Bad discussion heading in the Governor meeting

[Pierre Dénommée]

There is a topic labelled Canada Revenue Agency NFP (Not For Profit Regulations) in the Governor's meeting. The CRA has nothing to do with the new NFP Act. It is coming from Industry Canada. Non compliant non-profit will be dissolved, If they were in Quebec, they would forfeit all assets to the provincial Government. All the money in the Chess Foundation of Canada will likely be lost if the CFC does not comply. CRA gives and revokes the Registered Charity status which is totally independent from the not for profit status.

The report was a piece of crap because

1. It does not complies with the Law
2. Whoever wrote it did not read the Act, this is quite clear in the numerous violations contained in the report.
3. No real effort to comply has been made
4. The report failed to defined the membership classes of the CFC
5. The report entertain the illusion that we can continue with the current Constitution with minimal changes only
6. A Constitution based on the report should be rejected by Industry Canada
7. The CFC proposed by the report would have no permanent structures

Many National Sports Organization have downgraded their athletes from members to Registered Participants, for example Alpine Canada http://www.sportlaw.ca/registered-participant/ . No public debate has even begun on the status of the CFC members: should it be downgraded? Is the Act granting to much powers to non-voting members? By default, non-voting members vote separetly on fundamentals issues, so the Junior Members alone could block a Constitutional amendment. Until this has been dealt with, there is nothing further to be done in the NFP compliance topic. The first step is the determination of the membership structure in full detail.

The proposed report has no perrmanent structure for the CFC. Any NSO must have permanent structure on which the members/registered participants may volunteer. Technical commission, arbiters' council, Fundraiser committee and so on.

I have been in charge of the transition project for about on week, until the president give back the project to a member of the Committee whose work has been rejected. There should be no surprise that the Committee member did not make any further progress: apparently he his still defending the old defeated report.

Also, stop discussing about the possibility that life Governors are no longer legal: they are clearly illegal. You could give them the status of special consultant to the board of Directors, in fact, they could have any status that does not confer them any authority.

There is another interesting text at page 13 of this http://www.altruvest.org/pages/wp-co...Governance.pdf

Note: Some organizations have an Executive Committee to handle
important board matters, often because the board is too large to
deal with them effectively and efficiently on short notice. There
are risks in this because it can divide the board into “in” and “out”
groups. The non-executive committee directors may be held liable
for the decisions and actions of the Executive Committee over
which they have little influence or control. Directors should always
be kept apprised of, and be involved in key matters on an ongoing
basis. In the corporate world, having an Executive Committee is no
longer considered good governance practice for the above reasons
which are equally valid in the not-for-profit sector. However, if
members of a not-for-profit board agree that they need one, the
committee’s role and power to deal with confidential or sensitive
issues should be limited.

The Chartered Accountants of Canada clearly recommend to get rid of the Executive, I do not see any sign that we have even considered that. If the Executive does something illegal, Marc Poulin could be sued for 1 000 000$. Why? Because he is solvent, he can pay the million and because the new Law considers him responsible for the actions of the Executive even if he his totally unaware of the situation.

The new Law itself is a radical change and believing that we can go on almost without any changes is a serious error. By forcing a new Constitution, the Government gives us an opportunity to improve, we should not waste it.

Dear CFC Governors, this report has been defeated, please assume your responsibilities and come with something new that really complies with the Laws. Not with a proposal that would give absolute power over the CFC to a group of 8 people. Please reread the old debate and understand why the report has been defeated. The reasons to reject it were compelling and the more we learn about the new NFP Act, the more it confirms that rejecting the report was the right decision.

I do not like the new NFP Act, it is way to complex. The France NFP Act, which is in use since 1901, has about a single page. That is because they believe in Freedom of Association, the principle that states that the Government should not tell the not for profit corporations how to structure themselves.

[Valer Eugen Demian]

Thank you Pierre! I fully support this position.