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Nonprofit Board of Directors

  • A good board is the key to success

  • An active board is essential

The board of directors of a nonprofit corporation is legally and financially responsible for the conduct of the organization. It is not a passive role but rather one that must be active for the good of the organization and for reducing liability of the individual directors. It is not just for-profit corporations that are under ever increasing scrutiny for ethical operations.

State laws may establish a minimum size of a board and in some states, new corporations can have a board of directors consisting of as little as only one member who fulfills all roles. As the corporation grows, others are added. As a general guide, nonprofit corporations should have at least five or more members who are related only in their commitment to the organization. Be certain to seek the advice of a lawyer if you have any doubt about the law pertaining to boards in your state.

The varied talents and contacts of a board from diverse backgrounds can help an organization grow. A good board member is one that brings unique ability and perspective to a board and takes an active interest in the organization. Having a "well known" board member for the sake of their name can be more damaging than beneficial. Having board members who are connected in the community, are representative of your constituency and truly want to help the organization succeed are a better fit.

The board governs the organization and has specific fiduciary responsibilities for which it must be accountable. These responsibilities are summarized in How to Provide Good Nonprofit Leadership, a brief article on board duties. Additional responsibilities vary but generally include oversight of policy, budgeting, planning, fundraising, human resources, program evaluation and board development. One of the most important roles of the board is to hire an executive director for the organization and to give that person room to lead. The board should provide oversight and not become involved in day-to-day operations.

The board is organized under officers and through committees. This is a practical and effective way to provide governance of most organizations and helps to involve all board members. Traditionally officers include a chair who presides at meetings and provides management of the board, a vice-chair who presides in the absence of the chair, a treasurer and a secretary. The treasurer and secretary positions may not be needed as today these roles are often assigned to staff of the organization.

Committees of the board can include a a finance committee, program committee, development (fundraising) committee, human resources committee, nominating committee (future board members) and other areas depending on the needs of the organization. Often smaller nonprofits may have just one or two committees or create temporary committees based on present needs. The best way to proceed is develop committees as needed and make them standing or temporary depending on the time it will take to complete committee objectives.

When boards meet, and they should, it is important to record minutes of the meeting. These minutes are a legal record of activity. They do not need to be extensive but they should adequately address matters of importance and show that discussions took place including any resulting decisions. Attendance at the meeting should be recorded as well. In legal terms, absence from a meeting or pleading ignorance does not relieve a board member of responsibility for actions of the board. The minutes should provide enough information that an absent member would be able to recognize important discussions that may require their additional review.

The chair of the board should serve as the conduit for communicating goals and objectives of the board to the executive director of the organization. All members of the board should also interact with staff, volunteers and those served by the nonprofit in order to gain insight into operations. This active interest also builds loyalty and enthusiasm and develops mutual respect between the board and those who fulfill the mission of the nonprofit every day.
 

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