What is the purpose of an association's Executive Committee?
No, the vaad (Management Committee) of a Association isn't just there to eat Borekas during meetings.
More seriously, in accordance with Article 25 of the Associations Law in Israel, the Executive Committee, otherwise known as the "Vaad", is responsible for managing all aspects and interests of the Association.
In other words, the Vaad has full powers to take decisions relating to the Association, as long as these decisions are not granted to another body of the Association, by Israeli law or by the Association's Articles of Association.
How are members of the Executive Committee elected?
The first Board of Directors is made up of the founding members of the Association. Subsequently, the General Meeting votes to elect the Executive Committee.
It is important to specify that the Management Committee must be made up of at least 2 people.
Remuneration of the Executive Committee
In accordance with Section 33 of the Associations Law in Israel, a person who provides services to the Association, in return for remuneration or a salary, may not be a member of the Management Committee.
In addition to the prohibition on Executive Committee members being employees of the Association, they are also prohibited from having any financial dealings with the Association, such as renting property to the Association, receiving money from the Association via third parties, etc.
A member of the Executive Committee may nevertheless receive remuneration from the Association for the time and attendance he/she devotes to Executive Committee meetings. He/she may also be reimbursed for expenses, subject to the statutory ceiling.
For more information on this point, see the article: How to use the Association's money?
Who can be a member of the Executive Committee?
Article 33 of the Associations Law in Israel has decreed that to be a member of the Management Committee, a person must meet the following 3 criteria:
- Be a member of the Association (Haver Amouta - חבר עמותה).
- Be of legal age.
- Never have declared bankruptcy (Poshet Reguel - פושט רגל).
What should an association's Executive Committee do?
The Management Committee of an Association must :
- Implement decisions taken by the Annual General Meeting.
- Define the Association's development policy and strategy.
- Prepare the program and plan the Association's work strategy, so that it can achieve its objectives.
- Ensure that no salaries or profits are distributed to members of the Association.
- Prepare and approve the Association's annual budget.
- Monitor the Association's financial situation and define the authorized credit for the Association.
- Appoint and dismiss the General Manager of the Association.
- Define the Association's organizational structure, and determine salaries if any.
- Prepare the Association's annual financial statements and explanatory reports, and present them to the Audit & Control Committee and the Annual General Meeting.
- Manage the list of Association members and Executive Committee members.
What are the obligations of an Executive Committee member?
In accordance with article 27 of the law on associationsIn accordance with the Articles of Association, a member of the Executive Committee must "act for the good of the Association, within the framework of the objectives it has set itself, and in accordance with the Articles of Association and the decisions taken by the General Meeting".
In accordance with the decisions taken by the Courts in Israel, a member of the Board of Directors must demonstrate loyalty, integrity and impartiality towards the Association, and observe high standards of professional ethics.
In other words, it must serve the best interests of the Association.
So, for example, if the Executive Committee has to decide who to call on for a particular service, the member of the Executive Committee must put aside friendships and family relationships, and under no circumstances favor a person close to him or her. All decisions must be taken with a view to furthering the Association's development and achieving its objectives.
The Executive Committee is liable for any breach of the law.
As we have explained in several places on this site, one of the fundamental principles of an Association is that it must never distribute profits to its founders. Unlike a company, whose aim is, among other things, to distribute profits to its shareholders in the form of dividends, an Association must work to achieve its objectives, and must under no circumstances use public money to remunerate its founders.
This is why one of the most crucial duties of the Board of Directors is to check that there has been no unauthorized distribution of salaries or profits within the Association.
In the event of unauthorized distribution within an Association, the members of the Executive Committee will be held responsible. They will have to prove that they did not know, and had no way of knowing, that such a distribution was being carried out. Or they must prove that they did everything in their power to prevent such distribution.