With the current focus on WE Charity and the CSSG program, there is a lot that can be learned about transparency in the charity sector.   I will now discuss directors’ changes and the importance of notifying Corporations Canada if you are Canada Not-for-profit Corporations Act (“CNCA”) corporation.

CNCA corporations are required to report any changes regarding directors by filing a Form 4006 within 15 days of the change or, in the case of a change to a director’s address, within 15 days of being notified of the change.  This is a legal requirement and not every charity meets that requirement but it is still a legal requirement.

So what do the WE Charity filings have to say:

Here are copies of all the documents reflecting director changes since its date of continuance (November 29, 2013) from being under the old Canada Corporations Act:

 

  1. Form 4002 filed on November 29, 2013; (2013-11-29 Form 4002)
  2. Form 4006 filed on November 26, 2015;(2015-11-26 Form 4006)
  3. Form 4006 filed on April 8, 2019; (2019-04-08 Form 4006) and
  4. Form 4006 filed on April 28, 2020 (shows Michelle Douglas resigned on March 27, 2020 and a few other directors resigned on April 4, 2020). (2020-04-28 Form 4006)

 

Just as filing by-laws within 12 months of passing them is a requirement (they did file it) or filing Annual returns (which they did) (although not correctly in that they erroneously identified themselves as “non-soliciting” and more importantly did not file financial statements as required under the CNCA as we note here).

 

So if Michelle Douglas resigned on March 27, 2020, and another 5 board members resigned/were terminated on April 4, 2020 a Form 4006 should have been filed much earlier than April 28, 2020 (the date when the Form 4006 was apparently actually filed by WE Charity).   Keep in mind that it appears to have been filed online and it only takes a few minutes to file the form.

 

So instead of filing within 15 days they took almost a month.   Normally I would not be worried about that as very little happens in a month but in this case they were apparently proposing major projects to the Federal government and having discussions with the Federal government and if someone checked who their board members were on the Corporations Canada website they would have the wrong information, and not realized there was a very big change in the composition of the board.

 

We don’t know if on April 4 those directors were actually on the board or if a filing was just done on April 28th indicating that they were on the board as of April 4th.  Was there a members meeting to do the appointment or resolutions signed in lieu of a meeting? When was that members’ meeting?

 

 

No organization should call themselves “transparent” if they don’t do mandatory filings in a timely way, especially when those filings are very easy to do.    Only after doing mandatory filings should you look to other types of transparency such as social media, websites, newsletters, etc.

 

If you are confused about your mandatory filings retain a professional advisor that knows something about non-profits and charities.