But be careful!
Recent social inspections at some small dance non-profit organizations have shown that making a wrong choice regarding the status of a board member-employee or mishandling the administration can have significant consequences.
That’s why we want to strongly advise all dance organisations to handle compensations to board members wisely.
Yes, you can pay board members of your vzw
but it’s crucial to do it in the right way.
Make a clear distinction between:
- Compensation for the board mandate
- Compensation for a specific task or assignment
And strictly follow these principles:
- Avoid conflicts of interest
- Choose an appropriate status or compensation form and adhere to all relevant rules.
Compensation for the Board Mandate
In our sector, it’s not common to pay board members for their mandate, but it is possible.
When a board member is paid for their board mandate (attendance fees, sitting fees, annual compensation, etc.), it is considered as a self-employed professional activity. The board member must be self-employed and comply with all related obligations.
Most board members do not receive payment for their mandate and take an “unpaid mandate.” They are considered volunteers and can receive volunteer compensation. You can find more information about volunteer compensation on our page about Volunteer Reimbursement.
The General Assembly decides whether or not to pay compensation, the form, and the amounts. It’s best to state in your statutes whether the board mandates are paid or unpaid. The specific form and amounts can be recorded in the minutes of the General Assembly.
Compensation for a Specific Task or Assignment
Avoid conflicts of interest
There must be a clear and distinct separation between the board mandate and the paid assignment for the vzw.
For instance, there’s a clear distinction between giving dance lessons and workshops, creating artistic performances, and handling bar and cleaning duties. These are clearly defined tasks in terms of content, time, and space.
However, for tasks such as administrative support, financial management, bookkeeping, and business-related work, it becomes less clear what constitutes unpaid “board tasks” versus “specific tasks” that are compensated.
To make the separation clearer:
- The person in question should not participate in decisions about their hiring or remuneration for the specific assignment.
- Other board members should independently make decisions about this. This can be done in a separate meeting from which the person in question is absent, or they can temporarily leave the meeting during the discussion.
- Clearly record the decisions in the minutes, including the fact that the person was not present during the discussion.
- Create an agreement for that specific assignment with a clear job description.
Respect the Status or Compensation Form:
If your vzw chooses to compensate a board member for a specific assignment, you must select a compensation form or status. Ensure that you respect the characteristics of the chosen status.
As a freelancer
If the specific assignment is performed as a freelancer (self-employed or via an employment cooperative), where the freelancer works independently without being subject to authority.
>>> Create a service agreement with a clear mention of the tasks and compensation, and ensure this is clearly stated on the invoices.
For detailed information about obligations and rules, refer to our pages on Interim or Employment Cooperative and Self-Employed as a Secondary Activity.
As an employee
If the board member is employed (temporary) under an employment contract or under Article 17 status, where the assignment is performed under authority and control, with other board members exercising authority and control to ensure the employee does not have to answer to themselves as a board member.
>>> Make sure that all correct administrative procedures are in place: employment contract, Dimona declaration, work accident insurance, work regulations, declaration with the EDPW, timely and correct payment of wages, and keep records of consultations and performance evaluations.
For detailed information about obligations and rules, refer to our page on Article 17.
As a volunteer
Create a volunteer agreement with a clear description of the task, place, location, time, and adhere to all other rules and obligations, which you can read about on our page about Volunteer Reimbursement.
The Managing Director
If the board chooses to delegate daily management to a Managing Director, they are usually compensated for this role. The Managing Director should be clearly named in the statutes to avoid any confusion. Additionally, consider the other principles to ensure that conflicts of interest are avoided and have a clear agreement in place.
Good Governance / Good Cultural Governance:
A healthy and clear relationship between the General Assembly, Board, employees, and other stakeholders (employees, volunteers, etc.) is essential for a vzw, even for a small one managed with friendship.
But what does “healthy” mean? A good guideline is the principles of good governance or good cultural governance.
You can read more about Good Cultural Governance on our page about The Organs of the vzw and in this checklist of 23 principles compiled by the Culture Management Fund of the University of Antwerp.
Always ensure good written documentation, such as a household regulation, meeting minutes, clear procedures, etc.
Want to know more?
Check our pages on vzw’s and Paying and getting paid.
Sources:
- https://www.scwitch.be/kennisbank/bestuurders-betalen/ – Last accessed on 20/07/2023
- https://www.cultuurloket.be/inspiratie/kan-je-bestuurders-van-een-vzw-betalen – Last accessed on 20/07/2023
- https://www.uantwerpen.be/nl/projecten/fonds-voor-cultuurmanagement/onderzoek-publicaties/bestuurscode-cultuur/toolbox/ – lLast accessed on 20/07/2023
- https://socius.be/organisatiebeleid/decreet/goed-bestuur/ – Last accessed on 20/07/2023
- https://www.kunsten.be/advies-orientatie/de-tien-principes-van-goed-bestuur/ – Last accessed on 20/07/2023
- https://www.cultuurloket.be/kennisbank/leiderschap-en-organisatiecultuur/goed-bestuur-van-je-organisatie-inleiding – Last accessed on 20/07/2023