Changes Made to New York’s Not-for-Profit Corporation Law
A Feb. 10th memo from Hinman Straub, LeadingAge NY’s general counsel, summarizes several changes made to the Not-for-Profit Corporation Law (NPCL) authorized by legislation signed into law by Governor Cuomo last November.
Although the provisions of the legislation will not take effect until May 26, 2017, the impact of several of these changes on not-for-profit organizations may prompt these organizations to make any necessary changes in their bylaws, as well as to consider postponing certain actions (such as reviewing related party transactions and determining the independence of directors) until these new provisions become effective. The law changes will affect the following areas:
- Creation and authority of committees of the Board of Directors;
- Delegation of oversight of related party transactions to a specified committee;
- An employee of the not-for-profit corporation serving as board chairperson;
- Board oversight of compliance with the conflict of interest policy;
- Board oversight of compliance with the whistleblower policy;
- Definition of an independent director; and
- Definition of related party transactions.
These amendments to the NPCL are intended to provide greater flexibility to not-for-profit organizations, and also to permit them to more effectively adopt procedures to comply with the legal requirements. The Attorney General is expected to issue additional guidance closer to the effective date of these changes.
Contact: Dan Heim, email@example.com, 518-867-8383, ext. 128