- Medicine Information and Evidence for Policy > Information and Publications
- Medicine Access and Rational Use > Rational Use
(2005; 165 pages)
11.2 Why does a drug bulletin need a structure?
There are a several reasons why a drug bulletin needs an organizational and legal structure, either through a formal relationship with an existing organization, such as a hospital or a university, or by establishing a separate legal entity. When a non-profit organization is incorporated, it becomes a separate and distinct legal entity, possessing virtually the same powers as an individual. Thus, it acquires rights and obligations, and may own and control assets, enter into contracts, incur debts, sue and be sued. A corporation, unlike individuals, can only act through agents, namely its directors and officers.
It safeguards and maintains independence
A legal and organizational structure protects the independence of the drug bulletin. The independence of the organization is crucial for a drug bulletin and forms one of the criteria for membership of the ISDB. An organizational structure provides a means to develop formal criteria for independence and a democratic process for discussing and further developing such policies.
It can provide legal protection
An organizational and legal structure can provide the editors of a drug bulletin with protection from legal actions taken against them individually. Generally speaking, members and directors of a corporation are not liable for the defaults of the corporation (although any group planning to become a non-profit corporation should consult a legal expert in their own country about this). Individual persons become responsible for those debts and obligations only if another legal principle applies - for example, they give personal guarantees, participate in a fraudulent transaction or something of that sort. In order to tap into this limited liability concept, it is necessary for the organization to disclose its limited liability status on contracts, invoices and other similar documents. This involves making sure that the proper legal name of the organization appears on all those documents, including the “Inc.” or “Incorporated” or “Ltd.”, or “S.A.” portion of the name, depending on the country. Directors and officers of a corporation can, however, become personally liable to third parties if they breach the duties and obligations imposed on them by law. A legal expert in your own country should be consulted about these issues, including the issues of the corporation and individuals obtaining liability insurance.
It provides financial protection and makes fundraising possible
An organizational and legal structure provides protection against financial risks for the individuals involved. The financial risks of the organization should not rest on the shoulders of individuals. Financial risk should be carried by the organization as a whole. The organization would be responsible for financial management, budgeting, bookkeeping and reporting.
Many drug bulletins raise money from government, foundations, sponsors or from individuals, for example through subscription fees. These donors will be reluctant to trust their money to a bulletin that does not have a proper organizational basis and responsible financial management. Most funding agencies and governments will not provide funding to an initiative without a formal legal structure.
It allows the bulletin to enter into contracts
In order to be able to enter into contracts with others, for example, to rent an office, hire staff, or make arrangements with a printer, the organization will need to have a separate legal identity. An informal group or a committee cannot normally make such agreements.
It facilitates the decision-making process
An organizational structure is necessary to make responsibilities clear, to facilitate decision-making processes and to help to solve problems. Most organizations establish a basis for the way they work in a set of governing rules (often referred to as a constitution or statute). A very good starting point for writing your own constitution is to collect examples from other related organizations. A lawyer can help to adapt the text to the specific needs and situation of the new bulletin and the legal requirements of the country.