Nonprofit Scenrios

MNGT 460-Assignmentn #1

1. Board governance is an important part of a nonprofit organization; the board holds many roles in the organization that helps fulfill the mission of the organization. In many cases, and nonprofit organizations, like the Hersey Trust Case, boards want to maintain their Duty of Care in order to take care of their organizations by using sound judgment in order to use all assets, including facility, people, and good will; and provide oversight for all activities that advance the nonprofit’s effectiveness and sustainability” (www.councilofnonprofits.org). However, in an effort to exercise the Duty of Care, boards may encounter opposition from the community. In which case, the board should maintain a Duty of Obedience. It is very difficult for a board to maintain both legal duties when they conflict with each other. A nonprofit organization board must recognize the impact their decisions would have on the community. It is also important for the community to recognize decisions nonprofit boards make, and the reasons why they are made. The relationship with the Board and the community is very important because it facilitates transparency, and fosters a strong partnership with both entities. Because the board knows the goings-on of the organization, in most cases, more than the public, a board’s decision should take precedence over the opinion of the community, provided that the decisions being made, maintains its ethical benefit to its beneficiaries.

2. In the Hershey trust it was evident that both boards wanted to maintain and improve the Hershey Foods financial stability. Both boards wanted to protect the company stocks and profits in the declining economic climate. The Milton S Hershey trust wanted to improve the trust's economic standing and prevent the lost of profits buying the Cadbury company to increase the trust's revenue. However, the Milton S Hershey trust needed to borrow money in order out bid Kraft. Hershey Foods saw that...