llinois Governor J.B. Pritzker recently issued a state-wide mandate to minimize the spread of the novel coronavirus (COVID-19). This short article addresses the mandate’s immediate ramifications for religious organizations, social service providers, and employers.
Nonprofit directors and officers owe the nonprofits they serve a fiduciary duty of due diligence. In the context of COVID-19, this means board members should be as mindful of COVID-19-related matters as they would be for any safety-related issue. The ordinary legal standard for whether board members have satisfied their legal duty is generally known as “business judgment rule:” What would an objectively reasonable person do in a similar situation? As nonprofits grapple with still-emerging challenges, here are key practices and initial recommendations based on the current situation, all of which are important for fulfilling due diligence responsibilities.
When a conflict develops involving a nonprofit, its leaders, or its programs, one of the first calls is usually to the nonprofit’s lawyer. But when the time comes to call the nonprofit’s attorney, two important questions arise: (1) Who should properly make that call, and (2) On whose behalf is the call being made? These two questions highlight a more foundational and general question: Who or what is the attorney’s client in a conflict involving third parties or internal disputes?