By Clare Jordan
As nonprofit consultants, we at CapDev have noticed two paths that emerge when talking with a potential client. If a board member contacts us, the issue is usually problems with staff; and if a staff member contacts us, it’s often concerns about the board. Either of these assumptions often prove correct, and we find that both issues are born out of a misunderstanding and/or a lack of awareness about the role of a board for a nonprofit organization. So, let’s not assume that the board fully knows its job or that the nonprofit’s staff has an accurate understanding of the board’s roles and responsibilities.
To bring clarity to those roles, let’s dig into what everyone – board and staff alike – really need to know:
First, a Few Assumptions:
- Board members are selected because they bring a needed skillset and demographic.
- Board members join the board with all good intentions to serve for the good of the organization and the cause.
- The organization follows an intentional vetting process for board enlistment.
Next, the Issue:
Passion does not automatically translate into effective governance. Too often, well-meaning board members sit through meetings uncertain of their actual liabilities, unclear on where staff boundaries lie, and under the impression that their only job is to show up and vote.
Nonprofit organizations benefit most from board members who bring not only a personal connection and passion for the mission, but who also know something about board governance. The thing is, most board members, even those who have a long history of board service, do not come to the role of board member with any knowledge or training on the real role of a board member.
And, importantly, most nonprofits do not provide training specific to the role and expectations of a board member. This puts the board, the staff, and the organization itself at risk.
So, What Are the Basic Nonprofit Governance Practices:
According to BoardSource, recommended board practices include:
- The board should have more than the one annual meeting required by law. Most state laws require at least one annual meeting, but both BoardSource and CapDev believe that one meeting is insufficient for boards to provide proper oversight.
- The board must formalize a process for setting appropriate compensation for the chief executiveand the full board should approve the compensation package.
- The full board should review the IRS Form 990 before it is filed.
- The board must ensure that there are policies related to disclosing and managing conflicts of interest and that there is a strong whistleblower process in place.
- The board should ensure that an annual audit is conducted and that the board engages directly with the audit firm to discuss the results.
That’s all pretty basic, you say? Wait, there’s more!
What Are the Responsibilities of the Board?
Again relying on BoardSource, a board of directors is the governing body ultimately responsible for a nonprofit and has specific legal and ethical responsibilities to the organization. There are ten basic board roles and responsibilities (listed below) grouped into three main areas:
- Providing oversight
- Securing resources
- Setting strategy
It is important to understand that boards represent the public for the purpose of governing tax-exempt organizations for the betterment of the communities they serve. That means both that board members’ duty is to the greater good of the community being served, and that who is on the board greatly impacts how the board operates and what role it plays.
As in any role, it is important for all boards to ensure that every board member fully understands what’s expected and needed of them, and then for the board to hold each member and itself accountable.
Starting with the Legal Duties of Nonprofit Board Members:
As defined by Boardable:
- Duty of Care: Members should be committed to fulfilling their roles and assisting the organization to the best of their abilities. In other words, they should actively participate, practice open communication, follow through on assignments, and support program initiatives.
- Duty of Loyalty: This responsibility means that all activities and decisions should be completed in the best interest of the organization and the cause, not the individual board member. Those who exemplify this duty fully embrace the mission.
- Duty of Obedience: While board members should do everything in their power to drive the organization’s mission forward, they still must follow the organization’s guidelines. These guidelines are found in governance documents, and a board that strays from these rules can steer organization in the wrong direction.
Next, the 10 Basic Board Roles & Responsibilities:
- Determine mission and purposes, and advocate for them
- Select the chief executive
- Support and evaluate the chief executive
- Ensure effective planning
- Monitor and strengthen programs and services
- Ensure adequate financial resources
- Protect assets and provide financial oversight
- Build and sustain a competent board
- Ensure legal and ethical integrity
- Enhance the organization’s public standing
Finally, How Are Board Members Held Accountable:
- Orientation: A thoughtfully developed board orientation is a critical first step to building a strong board team.
- Preparation: The board leadership (typically the Executive Committee) should work closely with the staff leadership to prepare board meeting agendas to be shared well in advance of a meeting. It is every board member’s responsibility to review materials and come prepared for discussions.
- Engagement: The best boards are usually the most engaged. Board members ask good questions and the chair drives for a balance of focus on oversight, resources, and strategy. Further, many boards are strengthened by holding annual board retreats and/or including some social time in addition to board meetings. The best boards have developed systems* of engaging every board member in serving the organization in multiple ways that best suit each individual member.
*To learn more about CapDev’s Board Ambassador program, contact Clare Jordan at cjordan@capdev.com.
Building a strong board starts with the enlistment process. For most nonprofits, it is imperative that board and staff leadership work together to identify and recruit future board members through an intentional process. Your board should be the source of your vision, and thus its membership should exemplify the best of what you want for the nonprofit’s future.
But don’t let board development stop at the point of nominating and voting on new members. Work to build well-informed, engaged board members who will work for the organization and the greater good it serves. That is a board that knows what it’s doing.
For more on the common nonprofit board responsibilities from BoardSource, visit: https://boardsource.org/fundamental-topics-of-nonprofit-board-service/nonprofit-board-responsibilities/
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