The Israeli Nonprofit Organization and the Executive Board
There are three mandatory institutions of any nonprofit organization in Israel, and this article will address the institution of the Executive Board.
This Series of Posts
Our law firm has experience in a variety of fields, including Israeli NGO law (or Israeli nonprofit organization law). This article is one in a long series focusing on nonprofits or charitable organizations (an amutah in singular and amutot in plural) in Israel. This series addresses rules and regulations to help you effectively manage your nonprofit organization.
For more information on the Israeli Corporations Authority which oversees Israeli nonprofit organizations, see the government website. For more articles from an Israeli lawyer and legal advice for Israeli nonprofit organizations related to the topic of this article, see our articles about the three mandatory institutions of an amutah, the General Assembly and the Audit Committee.
Background Information and Your Nonprofit Organization
Every amutah in Israel is required to have a minimum of the following three institutions: a General Assembly, an Executive Board and an Audit Committee. In order to request more institutions, the amutah must discuss this in its by-laws and have it approved by the Registrar of Amutot.
This article will discuss the second institution as well as its roles and responsibilities.
The Executive Board is the institution responsible for managing the amutah’s affairs and has the authority to make decisions that are not already specified in the law, by-laws of the amutah or designated to the other institutions of the amutah.
Executive Board Members
The first members of this board are the founders of the amutah, and after this point the General Assembly elects members of the Executive Board. As with the General Assembly, all members of the Executive Board must be over the age of 17, and Executive Board members must be members of the amutah. The law requires a minimum of two members on the Executive Board although the General Assembly may decide the exact number (unless the by-laws stipulate a specific number). The General Assembly also has the authority to remove Executive Board members. Executive Board members’ tenure is limited to four years, although exceptions can be made, thus elections for members must take place once every four years at a minimum, unless by-laws stipulate even shorter periods.
Payment for Board Members
The law clearly states that Executive Board members may not receive payment for their services to the amutah other than for their position as members of the board. This means that an Executive Board member may not be an employee or provide contractual services to the amutah. They can only be reimbursed for their expenses and participation in the board meetings, although there are also specific regulations regarding these funds.
The Authority of the Board
The Executive Board has the authority to, among other things, carry out the decisions of the General Assembly, shape the policies of the amutah, approve annual budgets, decide on the structure of the organization as well as salaries and payments, produce financial statements on behalf of the amutah which will be submitted to the Audit Committee and General Assembly, and to prepare a report for the General Assembly regarding the amutah’s state of affairs.
Signatories for the Nonprofit Organization
In order to ensure proper financial management of the amutah, the Executive Board must select two or more members of the amutah (or individuals who have positions within the amutah) to sign all documents as well as any paperwork dealing with financial transactions like checks, contracts, loans, investments, etc. The minimum of two signatories do not need to be members of the Executive Board, but they may not be members of the Audit Committee or first-degree family relations. When submitting reports to the Registrar of Amutot, it is required that two Executive Board members sign them.
Advocate Joshua Pex specializes in nonprofit organization law in Israel and would be happy to discuss the needs of your organization with you. If you are interested in starting an Israeli nonprofit organization and have questions about the board, Israeli nonprofit law or Israeli nonprofit organization (amutah) management in Israel, please contact us.