A board of directors holds a fiduciary responsibility toward its MTC. A board member has a duty of loyalty owed by a board member to act in good faith and in a manner that he or she reasonably believes is in the best interest of the organization. 

Where a board member is also an employee of the MTC or otherwise a related party, conflicts of interest may arise that compromise the ability of the board to make unbiased decisions. The MTC should evaluate the independence of its board and ensure that conflicts of interest do not undermine the board’s ability to serve its purpose effectively. 

Compensating independent members of a board of directors—those who are not otherwise employees of the MTC—is unusual for nonprofit corporations in Massachusetts. Individuals with a personal financial interest in a nonprofit organization may be less likely to question the decisions of the organization’s management who also determine their compensation or fees, or give unbiased consideration to changes in management or activities. 

Choosing not to compensate independent directors is more consistent with the nonprofit purpose of operating an MTC for the benefit of Patients, including providing separate discounted pricing plans for Patients who can demonstrate financial hardship. 

If an MTC determines it needs to compensate members of its Board of Directors, it should be prepared to demonstrate that the decision to do so is compliant with this guidance.