Thursday, October 19, 2006

BREAKING: Fernandes Threatens BOT with Fiduciary Duties?!

What are Fiduciary Duties? MishkaZena:notes that in the Washington Post they report Fernandes will threaten the Board with a violation of their Fiduciary Duty. What are Fiduciary Duties? From Wikipedia:

When a fiduciary duty is imposed, equity requires a stricter standard of behaviour than the comparable tortious duty of care at common law. It is said the fiduciary has a duty not to be in a situation where personal interests and fiduciary duty conflict, a duty not to be in a situation where their fiduciary duty conflicts with another fiduciary duty, and a duty not to profit from their fiduciary position without express knowledge and consent. A fiduciary cannot have a conflict of interest. It has been said that fiduciaries must conduct themselves "at a level higher than that trodden by the crowd."[1]

So what Fernandes is threatening through the reported statements on MishkaZena's blog would not be a MONETARY obligation but a conflict of intereston the part of one, more, or all of the trustees, possibly related to Fernandes herself. It could simply be because the Board support the Gallaudet Community's demands, which is a conflict of interest to their responsibility to support the President-Select.... It could be anything. We should wait and see. But the implications of this comment seriously bothers me. It may be in going public Fernandes has overplayed her hand-won't people call for an investigation, now that it's known there's some violation? There is also this, from the same article:
" . . . I'm not really thinking of resigning, no. But I'm trying to think of how . . . to work from now until January to be in a position to be where I can be effective."

Why January? What will make Jane Fernandes more effective in January? Can someone explain?

4 comments:

Anonymous said...

Well it's interesting. OK, I've created a 501(c)(3) (and served on its board), plus I'm a certified paralegal (but NOT a lawyer, so this ain't legal advice, yadda yadda). IME, most if not all boards by definition have a fiduciary duty. There's conflict of interest stuff, there's prohibitions profit (by you OR family/friends), that kind of thing. Particularly for any kind of board that oversees "social good" stuff -- non profit, charitable, educational activities.

I've been wondering about the financial angle ever since I got a whiff of some financial irregularities in one or other of the blogs last week. The protesters should be calling for a financial audit of Gallaudet. It seems that Holts complaints of 2004 are by themselves enough to trigger a review.

Of course, the consequences of such an audit could be quite severe, including the closure of the school itself. Although I note that it was created by charter and not incorporation, so the rules are different there (I'd have to look that up).

But anyway, financial considerations perfectly explain a lot of otherwise completely perplexing behavior.

Carl Schroeder said...

We are not in the know to understand JKF's threat; however, we have the right to know what "fiduciary duties" entails. It's not going to be very pleasant but we need complete housecleaning at Gallaudet University which is now apparent.

Anonymous said...

"Fiduciary duty" refers to a heightened standard imposed by law to act in someone else's best interests. Here, that would be Gallaudet. JF is threatening the board that, if they ask her to leave or remove her, that would b a violation of their fiduciary duties, and that they will then go under "intense scrutiny" by congress. Disgusting.

Anonymous said...

Simply removing someone does not trigger dereliction of fidiciary duty. Now,t here may be details in her contract that she's referring to but otherwise it seems pretty clear the threat is this: throw her out, and she will divulge enough information to trigger a review of their fiduciary duties.

However, I think she just made a huge tactical error in having this (accidentally or otherwise) published in WaPo. My guess at this point is she won't last a month. I've talked to several hearing folks now -- with no real background on this protest -- showing them the WaPo article and asking what they thought of it. While none of them wanted to venture an opinion without further info, every last one of them noticed the threat in her email and noted that it made her look uncooperative, hostile & belligerent.

My private bet at this point is she won't last another month. This was a big mistake on her part.