Every nonprofit organization is required by law to have a board of directors. While the make-up, size, and specific roles of the board can vary from organization to organization, we wanted to provide some useful information that applies to all boards.
So what is the responsibility of a board of directors? The board is responsible for a global outlook of the organization, providing goals and direction related to the mission statement, and ensuring that the leadership is carrying out those goals. The board is entrusted with and accountable for the leadership and governance of the nonprofit.
Board members are generally exempt from liability while carrying out their duties on the board. There are however a few exceptions:
· Duty of Care- requires that the board take the care and exercise the judgement
that any reasonable and prudent person would exhibit under similar
circumstances in the process of making informed decisions. The law realizes and accepts that members may not always be correct or make the best decisions, but holds them accountable for being attentive, diligent, and prudent in decision making.
· Duty of Loyalty- Requires the board and its members to consider and act in good faith
to advance the best interests of the organization. This is essentially a protection against a conflict of interest.
· Duty of Obedience- Requires obedience to the organizations mission, bylaws, policies, and other appropriate laws, regulations, and SOPs.
The organizations Bylaws should identify who serves on the board, the terms, method of appointment/election, and other parameters of the board. It is important that the senior executive staff has a seat at the board table. It is oftentimes that these leadership roles are specifically accountable to the board of directors.
It is important that board members attend as many meetings as possible. If a member is missing more than 50% of the meetings, it would be difficult for them to make informed decisions.
A secretary should be recording and taking minutes of all board meetings, so that information can be referenced in the future. Meetings are only as efficient as the person running them, typically the board chair. It is essential to have an agenda prepared and provided to each member a few days prior to the meeting taking place. While it is easy to get off-topic, it is important to stay focused on your agenda.
A successful board understands their roles and responsibilities, as well as the delineation of power to the Executive Director/President/CEO and their staff.
Does your Board of Directors focus on strategic planning and evaluation of your department? Check out our blog post on strategic planning for more information.
That’s it for now, stay tuned for more information on nonprofit board operations!