I am the executive director of a small company with 4 employees. My
director would like to be added on our checking account as an
authorized signee. I don't think this is a good idea and need some
useful information to back up my case besides my personal feelings.
Thanks.

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Clarification of Question by scottsirish-ga on 04 Jun 2005 11:20 PDT

Also, who would have the right to hire and fire if there are no board of directors

Is this "director" your subordinate or a non-manageming director,
representative of the owner(s)?
If the latter, what do the company's bylaws say about his position. 
If he is not involved in anything having to do with the company's
paying out money, he definitely has no need for access to the bank
account.
Indeed, if he is the owners' representative  - overseeing your correct
management, his access to the account would impinge on this function,
(and in my opinion is a rather suspect request).
Even if he is the sole owner of the company, (checking the bylaws
again) in your position I would point out to him that you are
responsible for operations and the correct bookkeeping, tax reporting,
etc., which can only be assured and controlled if payments from the
account can be related to the company's operations.  You could add,
that since it is his company, of course, he can withdraw funds, but
only with your management control so that this is correctly booked.
If he is only one of two or more owners, he cannot be favored, and the
other owners should know about his request - and your opinion -  and
decide.

If he is your subordinate, what are his reasons for wanting signing authority?
Just to make him feel more important as a "director"?  Because there
was a situation when it would have been convenient while you were
absent?

In such a small company, dual controls are almost impossible to
maintain (bills being independently controlled against orders and
receipt of supplies and services, etc.).  Does he understand the
responsiblity involved?

I would take him to lunch to discuss the matter, showing respect for
him and his request.  Maybe you already know that you are going to
refuse his request, but he gets to say his piece.  Maybe you can agree
on another solution.

Scottsirsh;
Hmmm ?
I rather thought that as executive director you were the boss,
although I did wonder a bit about the title in a company with 4
employees, one other of whom was a director.
Maybe I should have started by just asking for some details about the company.
     ("Right," I hear wiser heads nodding.)
Can you offer any?

Myoarin

We are a small sober living home with 30 residents. I took over the
org. from the person before me when he decided to go on to other
things. He called himself the executive director so the name just
stuck. I am the person who pays the rent, bills, and payroll. I have
no board of directors therefore I believe I should be the one to hire
and fire. Hope that helps

Thanks,
It doesn't sound like there is much need to have anyone else sign
checks, especially since it seems that most payments are regular in
nature (rent, payroll, utilities) and can be anticipated, as can
maintenance charges or repairs.

It would seem that there must be some kind of document for the
arrangement among the residents, with the property owner, whatever -
you call it a company.
If the bank account is not in your name, then the bank should have a
copy of something identifying the entity in whose name the account is.
Could it be a registered non-profit organization, or other registered
entity that had a file with the county recorder?  If so, has your
assuming the management be reported?

As to hiring and firing, again it is a question of what entity is
employing the persons and what your position is - and what your
state's laws say about firing someone with or without a written
contract.

If these points are all foggy, I suggest that you talk to a lawyer.
Handling money that is not your own without a document to justify it
is a risky situation.  Until that is completely clarified, certainly
no one else should have access to the bank account.

As you can read in the disclaimer below, this is not legal or professional advice.

Talk to a lawyer.  Even if you find documentation for the company, I
think you will feel more comfortable and confident if you have got
professional advice.

Sincerely, Myoarin

I have years of experience dealing with a close family member that was
a heroin addict for years.  He is not clean for 15 months.  He
continues to live at the treatment center and has job duties in
exchange for free room and board.  He earned this position and has an
outside job and can come and go as he pleases.

Clean and Sober House?  Someone want access to money?  Color me
cynical, but that's what jobs and personal checking accounts are for. 
Why does this person want ANY measure of control OR access to money
that is not his/hers?  Sounds like a terrible idea to me, and by the
way, I asked my (now clean) family member what he thought of the idea.

He was shocked you had to ask.

~~Cynthia

Whoops...  that family member?  The line should read NOW clean (not: Not Clean).

Sorry for the confusion.

Cynthia-ga,
At first I wondered if your comment got posted to the wrong question,
but I guess that you did mean it for this one.  It had not occurred to
me that a "sober house" might be what you suggest.  I would have
thought that such was sponsored by some organization that provided
more formal direction than seems to be the case from the qustion.
Myoarin