One of the most important responsibilities for many boards is to hire and set the compensation of a talented CEO/executive director to run the day-to-day management activities of the organization. When there are paid staff in place, rather than steer the boat by managing day-to-day operations, board members provide foresight, oversight, and insight: think of them as up in the crow’s nest scanning the horizon for signs of storms or rainbows to explore, perhaps with a pot of gold at the end! Yes, board members – your role as stewards of the nonprofits DOES involve fundraising. And…at the National Council of Nonprofits we are big promoters of the important role board members play as advocates for the nonprofit’s mission.
Board members are the fiduciaries who steer the organization towards a sustainable future by adopting sound, ethical, and legal governance and financial management policies, as well as by making sure the nonprofit has adequate resources to advance its mission.
Did you know?
- The vast majority of board members for charitable nonprofits serve as volunteers without any compensation.
- Arguably the most important policy for a board to adopt is a policy addressing conflicts of interest.
What’s the role of the board of directors of a nonprofit corporation?
Just as for any corporation, the board of directors has three primary legal duties known as the “duty of care,” “duty of loyalty,” and “duty of obedience.”
- Duty of Care: Take care of the nonprofit by ensuring prudent use of all assets, including facility, people, and good will;
- Duty of Loyalty: Ensure that the nonprofit’s activities and transactions are, first and foremost, advancing its mission; Recognize and disclose conflicts of interest; Make decisions that are in the best interest of the nonprofit corporation; not in the best interest of the individual board member (or any other individual or for-profit entity).
- Duty of Obedience: Ensure that the nonprofit obeys applicable laws and regulations; follows its own bylaws; and that the nonprofit adheres to its stated corporate purposes/mission.
We encourage all nonprofit board members to subscribe to our free monthly newsletters to stay up-to-date with issues that are popping up around the country, affecting the operations of charitable nonprofits, and in addition to be aware of useful resources.
Board members have an important role as advocates to help advance nonprofit missions