60% of directors involved in conflicts of interest and insider grants
NJN Network, Charlottetown, Prince Edward Island, Canada, April 28th, 2009
Five of the Board members of Music PEI are suspected of being in conflict of interest over their insider dealings. They all received grants directly or indirectly from Music PEI.
Last night we discovered a sixth board member who may have profited from his position on the Board.
This hurts Island musicians since the board is looking out for its own interests which are never the same as the musicians. Practically speaking and from an optics point of view it stinks.
It was argued yesterday by a musician that we need these music insiders to help musicians which is true. However, what we don’t need is a breakdown of the system of fiduciary trust where directors can direct money into their own bank accounts.
By law members of a board are not owners of the organization. They sit in trust for the beneficial owners who in the case of Music PEI are the people of PEI. As trustees, they must act with “utmost good faith”, avoiding even the appearance of conflict of interest. They are not allowed to profit from their board position. They are volunteers administering public money in trust.
If Wigmore, Doyle, Oakie, Milner and Melzer want to be industry insiders, they must resign their board positions.
No one can server two masters at once, a biblical epigram and principal of law.
For example, if you are buying a house your lawyer cannot act for you and the bank. He or she must chose whom they will serve and to whom the trust is given.
We didn’t make the law. Legislators, courts and judges made the law.
Board governance is well known to most people who sit on boards of directors. Directors must always operate in the best interests of the organization and its beneficial owners.
Obviously the Board has decided over two years to hand out money to directors.
If it happened once, the board member would be expected to recuse themselves from the meeting and discussion.
Since it has happened with more than half the Board, collusion between directors would be an obvious supposition. “If you approve my grant, I’ll approve yours.”
The Music PEI board of directors is acting as if the money from the Province of Prince Edward Island is theirs.
It is not. It was given to them in trust to dispense to musicians.
Once this mess is cleared up, all musicians will have a fair shake at getting the same assistance as everyone else. Corruption never benefits the many. It only benefits the few.
Related story Five Music PEI Board members in conflict of interest
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