According to the Corporation for National & Community Service, a quarter of all U.S. residents donate their time to community service. Board service strikes a chord among those who want to intensify their commitment to a cause and/or leverage skills acquired through years of professional development. That’s welcome news to nonprofits seeking capable, committed leadership to provide that much-needed boost to their mission, programs, and resources. Yet it takes the right people with the right skills and the right understanding of their roles and responsibilities to realize that promise. With that in mind, it’s worth taking a few moments to review the roles and responsibilities of your board of directors.
The board of directors provides strategic leadership for the organization. They set the organization’s direction, adopt policies and procedures, render key strategic and operating decisions, approve budgets, define anticipated program outcomes, oversee performance, and serve as guardians of organizational resources. They are also responsible for monitoring, evaluating, and reporting on the fiscal condition and financial performance of the organization. In short, they are accountable for all actions taken in the name of the organization.
Board members must also meet certain standards of conduct and engagement when dispatching their responsibilities. Nonprofit corporation law characterizes these standards in terms of three duties:
The Duty of Care
A board member’s actions and decision making must reflect a standard of care “that an ordinarily prudent person would exercise in a like position and under similar circumstances.” This standard implies a requirement to participate actively, prepare in advance for meetings and activities, and exercise critical thinking skills when taking action or rendering decisions.
The Duty of Loyalty
Board members must act in good faith to advance the interests of the organization. They must be free from any hint of impropriety and disclose promptly any potential conflict of interest.
The Duty of Obedience
Board members must be faithful to the organization’s mission, bylaws, policies, and procedures. Their fidelity sets an example for staff, volunteers, clients, and other constituents, and bolsters the public trust.
While governance is the board’s principal focus, committed board members look for other opportunities to advance the organizational mission. Resource development is an ongoing need. Board members may have valuable community connections through which the organization can secure funding, expand its sphere of influence, establish partnerships, or gain access to mission-critical resources. They serve as ambassadors who build relationships in the community and advocate on the organization’s behalf. And they’re trusted advisors who offer guidance to staff.
Nonprofit boards do not come in “one size fits all.” Their demographics, skill sets, and networks should align with the organization’s mission, maturity, programmatic needs, and fiscal health. Even the board’s role varies across nonprofits. For example, the smaller the organization, the more likely the board will be expected to “roll up their sleeves” and do the day-to-day work of the organization.
Having reviewed the board’s key responsibilities, we get back to the original question: Is your board ready, willing, and able to serve? Here are a few action items to help you form an answer to that question:
- Consider the board’s contributions and oversight with respect to strategy development, operational planning, fiscal management, fundraising, and personnel management. Does your board have subject matter experts who can exercise leadership in those areas? If not, do they have access to advisory boards to fill in the gaps?
- Consider the board’s responsibility to the organization’s mission, the quality and integrity of program offerings, and all of the constituents they serve. Does your board have the capacity to evaluate program design and effectiveness? Are relevant members of the communities served represented on the board? Through what means does the board stay connected to what’s happening “in the trenches”?
- Create job descriptions for board members (or dust off the ones you already have). Do you articulate their roles clearly? Have you specified the requisite skills, experience, and other requirements for success? Would prospective board members understand what is expected of them?
- Staff the board nominating committee with people who are serious about getting the best possible folks on your board. Develop a strategy for identifying and recruiting your ideal candidates. Assign roles, responsibilities, and timelines to execute the plan.
A strong board is vital to your success (if not your survival) in an increasingly challenging environment. Take time to ensure you’ve got what you need to thrive.
Interested in learning more about nonprofit board governance?
Click here to download our guide to effective nonprofit leadership, including how to avoid blurring the line between board governance and management as well as how to attract millennials to serve on the board.