Disputes over governance and control within Not-for-Profit organisations can happen. We can help you take good steps to resolve the dispute effectively, and avoid actions that will harm the prospects of obtaining a successful end-outcome.
In our experience, here are some examples of things that can help to resolve a dispute effectively:
1. Have a clear idea about what a “win” looks like for you.
Be clear on all your objectives, both legal and non-legal. If you do not have a clear idea about all of your objectives, you are at risk of pursuing a strategy that achieves only some (or none) of what you want.
2. Do your best to understand what the other side really wants.
Sometimes disputes can become technical arguments about procedures in the Constitution and whether they are being followed, but there is usually a more substantive issue that gave rise to the conflict in the first instance. Take steps to gain a good understanding of what is motivating the other people involved in the conflict; you might be surprised.
3. Avoid these common mistakes:
- Calling a meeting without following the correct procedure.
When a dispute arises, it is common for people to convene a meeting to have members vote to determine a particular issue in dispute – such as removal of governing body members and appointment of new ones.It is also common for people to make mistakes when doing so. Such as: not giving notice to all members, not giving sufficient notice, not having the proper authority to convene the meeting in the first place, or trying to pass resolutions contrary to overriding statutory provisions.Getting good legal advice early-on in the dispute can help you avoid these mistakes.
- Not following the governing documents.
In any dispute, careful attention should be paid to what the Rules or Constitution (or other governing documents) state.We recognise that many organisations do not regularly update their governing documents, and the documents can be out-of-step with organisational practices. This is not fatal, but it can result in a dispute becoming protracted and complex. It may mean that court proceedings are necessary, unless mediation is utilised to resolve the issues.It is also advisable to make sure that a competent person is appointed as Secretary, who will be diligent in maintaining the membership register, taking meeting minutes and having them signed as verified, and who is generally committed to taking steps to make sure the organisation runs according to the proper procedures.
- Putting time and energy into things that will not determine the issue or resolve the dispute.
Be cautious when making assumptions about what steps or strategy will result in a successful outcome for you. It is common to have misunderstanding about what legal (and non-legal) issues are relevant. Being clear on your objectives, and getting good legal advice early on can help you avoid this problem.
- Underestimating the “other side”.
Sadly, some people can resort to all sorts of unreasonable behaviour to try and take control of an organisation. Such as, unauthorised changing of the locks on premises or preventing others from rightfully accessing bank accounts.Workshopping a good strategy at the outset with your lawyer, and having good advice available throughout the dispute, can help to protect your position.
- Failing to get your house in order.
4. Talk with your lawyer about mediation (whether formal or informal).
Disputes can severely damage a Not-for-profit organisation and have a significant adverse personal impact on the people involved.
In our experience, many clients think there is no hope for the dispute to be resolved in mediation, but after discussing their objectives and workshopping creative strategies to achieve those, mediation emerges as a promising option.
Elizabeth Shalders, Senior Associate, Head of Not-for-Profit