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Organizational Structure, Governance, Insurance, 2

Organizational Structure

Organizational Structure, Governance and Insurance

 

The article below is excerpted from the audio transcript of a Policy Series Webinar presented by Jessica Brodey, attorney and consultant for the Pass It on Center, on March 24, 2008.  See Part 1 of this Webinar in which the need for Policies and Procedures was discussed.

 

Part 2:  Organizational Structure

 

Legal Status

 

How many people know their legal status as an entity? Are you incorporated? How many people actually know the answer to that and have that question resolved?

 

The first topic I want to discuss is within the context of organizational structure. And the first area within that is legal status. This is not an example of something that we think that you need to sit down and write big policies and procedures about. However, it is an important issue to consider and discuss so that you can go ahead and implement your policies and procedures properly. You need to ask yourself questions about whether you are a legal entity at all. Do you have the proper licenses to operate in the way that you do?

 

There are a lot of different legal entities. You can be a corporation. You could be a limited liability company. You could be a partnership. You could be a sole proprietorship. You can also be a non-incorporated entity. That just means that you kind of function without having a technical legal status. But that really means that all the work that you do is being done by you as an individual rather than the organizational entity. If you decide to become a legal entity, you have to decide if you're for profit or nonprofit. You also have to look and see if you're eligible for tax-exempt status or to get a tax identification number.

 

It's also important that you select the appropriate legal entity for the activities that you want to do. So it may make sense, if all you do as an organization is collect and donate to another organization, to function as a sole proprietorship.

 

Selecting the appropriate legal entity for your activities is really important. So you need to sit down and decide, what's your risk or exposure? How many people are involved? Because later on when we get into different issues, we’ll discuss whether you need insurance, and it's often easier to insure an organization than an individual. So what level of protection do you want? And, at what risk are your own personal assets?

 

Governance

 

The next area that we wanted to get into that really does require a little bit more with respect to documents is governance. Governance is about the operations and administration of your organization. How does it work? How will it be run? And one thing that's very important is board structure. Are you going to have a board? If you have aboard, how many board members should you have? What positions should there be on the board? For example, do you want a president, a vice president, and a treasurer? Do you just want a treasurer and a secretary? Do you want all of those positions? Do you want to have a board but no elected positions? What roles should the board members play? Do the board members have a very active role? Are they actually the day-to-day operators of your organization? Or are they more advisors or just more have to approve or disapprove of big plans and budgets? What is the role of the board? And that's something that you should sit down and do.

 

With respect to what documents you need when we're talking about policies and procedures with respect to the board, these are usually more legal-type documents than the policies and procedures we discussed in the first part of the webinar. You can put a copy of them, like the bylaws, in your policies and procedures, just like the Montgomery College policies did. The one thing that you would need potentially is articles of incorporation if you're a corporation or articles of organization if you're limited liability company (LLC). They're called different things in different states, but they are the formation documents.

 

You're going to want some bylaws that explain how many people must be present on the board to vote, how long a term is, how they get elected, and who elects or selects board members. All of that goes into the bylaws. We discussed the details of positions and roles earlier. The titles, roles and responsibilities of officers also are specified into the bylaws.

 

Vision or Mission Statement

 

You may want to have a vision statement. And we are going to have some documents that we can share that give you some information about how to write a vision or a mission statement.

 

Those things can be very important to your organization so that when you're trying to explain why you can or cannot serve a particular group or take on a particular project or expand in a certain way, you can look back to your organizational goals, your vision statement, and assess whether the projects you want to move into match up with your organization’s goals.

 

Staffing Model

 

Now, in addition to the organizational structure, you have to consider your staffing model. Are you just a mom-and-pop shop? Are you working one or two people out of the back of a garage who are volunteers? If you are, then your policies and procedures need to reflect that. Do you have volunteer forms that are signed for people who are coming in? Do you have a written volunteer handbook so that the volunteers know what they are or are not allowed to do? Do you have volunteer commitments that need to be made? Policies and procedures should specify how those volunteers work, what kind of coverage they have, what kind of rights they have, what responsibilities, and what permissions. All of that should be written out.

 

If you, as an organization, are committed to an all-volunteer force, that could be a policy. You know, "This organization is managed strictly through volunteer work. We affiliate with these types of organizations. We always seek to have a minimum of 'X' number of volunteers present each day." That's your volunteer process. Your procedures really are your handbook. What do volunteers do? How do they go about doing that? It's your training information. How long do volunteers stay? Under what grounds does somebody get terminated? Do you need to do any background checks on these? All of that should be in your volunteer policies.

 

For employee-based organizations, it's very similar. You have to have a written employee handbook. What are the different jobs you have? What are the responsibilities for each of these different employees? What should employees be doing and what shouldn't they be doing? What are their responsibilities? The more you can write it out and quantify that, the better off everything really is.

 

So when we're talking about writing policies and procedures, let's start from the employee-based. Perhaps you're an organization, and you have six employees, and the employees all carry the same title. And in your employee handbook, you can write down that you will have – that these are the positions that you have; these are the tasks for these positions. "Employees are not allowed to drive assistive technology to individual's houses, nor are they allowed to drive clients anywhere in their own personal car."

 

A policy could be employee/client intake. It could be all the ins and outs of what employees are allowed to do and how they should be doing them. "Employees must report to work at 9:00 a.m., and they must stay until 5:00. Employees have the right to a half-an-hour lunch hour." These are all things that are really relevant to the staffing model. "Employees are hired upon the consent of everyone else working there. At least three people in the office must interview any new employee." Whatever your policies and procedures are relating to that, they should be written down. And if you stop to think about what your organization does, you first panic, and you say, "I don't have anything like that written." But many of you, if you sit down and think about it, do have a way of doing things. It just hasn't been written down. So what we're asking you to do, in writing policies and procedures, is to start considering what it is that you, as an organization, do. And the easiest thing to do is to start looking in these areas and start writing them up.

 

Well, with respect to hiring, what do we do? With respect to implementation, what do we do? And the things that should be contained in this employee handbook are really going to be a smattering of all the other things that we're going to discuss in future -- in future Webinars. So when we talk about facilities management, if an employee is responsible for managing certain facilities, those steps and those questions that we'll raise later would go into the written employee handbook for the person responsible for facilities management. So this just tells you that, if you have an employee, you should have an employee handbook. And the information that's written in there should come from all the other sections that we will be discussing in the future.

 

Many of you have a hybrid approach. You have some employees; you have some volunteers. And it is very important to distinguish responsibilities. There may be, because of your insurance coverage, some things that volunteers can do and some things that only employees can do. And you really need to spell out those differences. And if you don't know what they are or you've never considered it, we really strongly urge you to start now.

 

Advisory Committee

 

Another area of governance, in addition to your staffing model and in addition to your board, is an advisory committee. Do you have an advisory committee? Do you want an advisory committee? If you have an advisory committee, the policies that you'll really need to develop relate to how that advisory committee is going to work. Policies should include your selection process for serving on the advisory committee; the terms of service for the advisors on the advisory committee; the role, function, and authority of the advisory committee; and the frequency of meeting. Is there funding for this or a set budget for the advisory committee? Those are the things that you'll want to define with respect to the advisory committee.

 

Some of you already have advisory committees, so it's really just a matter of sitting down and writing this up. And you may find, "You know, we never really did set terms. Perhaps we should do that," or, "We don't really know how this advisory committee came out, but how is it composed?" "Boy, we only have six representatives from the blindness community. We could really use some representatives from other communities. In the future, as people step off, we'd like to replace them with representatives from this, this, and that community." And it gives you a much more organized approach for how you want your advisory committee to work.

 

Some advisory committees also advise a board or board committee. When you look at the role and the function and the authority of your advisory committee, you should assess what they're doing. Are they advising your board? Are they coming in and advising the employees and the day-to-day administrators? Are they just providing general advice and evaluation and community feedback in some other forum? What other role do they play, and how integral to your organization are they?

 

This could just be on an ad hoc or an issue basis. So you could determine that you do not have a regular advisory committee, but for the upcoming initiation of project X, a new project that you're going to deploy, you may want to bring in an advisory board to give you feedback about how you deploy that or to tell you about the effectiveness of something that you've been doing for the past few years. Those are all appropriate options for the advisory committees. And some of you already have them in place. We're encouraging you to write down the details of how the advisory committee will function. Some of you have never considered advisory committees before. It may be worth considering, "Is an advisory committee a good idea for us in some capacity?"

 

Management

 

So another area of governance is management. Your management structure is a key consideration. Some people have a board, and the board is really the same thing as the people who run your organization. This is often the case when you have an all-volunteer organization. The board makes some big decisions and announces what it wants done, and the volunteers step up and implement it. And that's all that you have. You don't have any paid, permanent staff or officers that are essentially employees of the company that have a managerial responsibility.

 

Other companies, however, really do have a much more organized employee structure. And sometimes the employees just report up to the board. But sometimes the employees report to officers, perhaps a president, a vice president, or a chief operating officer or the person who's the project head.

That's your management structure. And it's something that you should consider and write down in specific detail. What role, if you have both a board and officers, what role does the board play, what role do the officers play, to what extent do the officers need to seek approval from the board, to what extent is there autonomy? If there are officers, you specify what the titles and roles of those officers. Often this is done within the bylaws. The bylaws, in addition to talking about the board, will say, "The board will appoint a president, a vice president and a secretary," or whatever is appropriate for your organization. The board will appoint a chief operating officer, or the board will appoint a project manager. And that is specified.

 

Again, the division of responsibility between the officers and the board is key here, and it should be written so there is no confusion. The staffing management is really critical in this point. What is the supervisory structure? Who's in charge? Are there job evaluations and reviews? How often, and is there a formal process? What is that process? Can you appeal if you don't like your reviews? If someone needs to be terminated, whose decision is that? Does the board need to approve it, or can the chief operating officer or president make that determination?

 

The governance and management people need to sit down and decide what you, as an organization, want to engage in, what you should be doing, what services you should offer and what your goals are. This goes back to the vision or mission statement. What services will you provide? Will you be charging? Will you be offering it for free? Who do you serve? Is it anyone who walks in the door? What are those services?

 

And then the next thing that really falls upon the management is that you need standard operating procedures for providing those services. That's the what, the who, and the how. When we're talking about procedures, we're talking about your standard operating procedures. They specify the nitty-gritty, day-to-day, details for how jobs should be done. It is the management who are ultimately responsible for ensuring that those standard operating procedures are in place and are being implemented appropriately.

 

See the other excerpts from this Webinar:

Part 1 – Policies and Procedures

Part 3 – Insurance

 

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DISCLAIMER

This work is supported under a five-year cooperative agreement # H235V060016 awarded by the U.S. Department of Education, Office of Special Education and Rehabilitative Services, and is administered by the Pass It On Center of the Georgia Department of Labor – Tools for Life.  However, the contents of this publication do not necessarily represent the policy or opinions of the Department of Education, or the Georgia Department of Labor, and you should not assume endorsements of this document by the Federal government or the Georgia Department of Labor.

 

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Other Information

Title: Organizational Structure, Governance, Insurance, 2
Module: Organization
Author: Jessica Brodey
Audience: Administrator
Sub Title: Webinar: Part 2 -- Organizational Structure
Procedure:
Organization Source: PASS IT ON CENTER
Last Reviewed: 11-30--0001 12:00 AM