Best Practices: Boards of Directors of Nonprofit Organizations

Prepared by Vicki Stasch, Management Consultant

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Roles & Responsibilities

According to nonprofit corporation law, board members should meet certain standards of conduct:

Duty of Care: using best judgment, using reasonable caution in decision making, attending meetings, asking questions, reading and learning about programs, participating in discussions and committees

Duty of Loyalty: putting personal and professional interests aside. Adhering to a conflict of interest policy.

Duty of Obedience: being true to the mission, using funds for appropriate purposes, adhering to all laws and regulations that apply to nonprofit organizations

The Three"W's" for Good Board Members

Wealth: Access to resources

Wisdom: Knowledge of the community and ways to help the organization grow

Work: Willing to work for the organization

Board of Directors' Responcibilites

1. Determine and implement the organization’s mission and purpose
2. Ensure effective organizational planning
3. Ensure adequate resources
4. Manage resources effectively
5. Determine, monitor and strengthen programs and services
6. Select and regularly evaluate the administrator
7. Ensure Legal and Ethical Integrity and Maintain accountability
8. Recruit and orient new board members and assess board performance
9. Enhance the organization’s public standing

Executive Director’s Role

Executive Director has one boss, the entire board, not individual board members

• Oversees day-to-day operations
• Implements board policies
• Hires, directs, supervises evaluates staff and volunteers
• Prepares annual budget for board approval
• Manages finances
• Plans the annual operations to fit the boards long range plan
• Keeps the board informed and recommends policy changes
• Reports on problems, plans, progress
• Prepares annual report on progress of the organization and submits to the board

Areas of Expertise Needed on the Board

• Public Relations
• Legal
• Financial/accounting
• Fund Development
• Program
• Real Estate
• Client
• Age, gender, ethnicity, geographic diversity

Examples of Board Policies

• Types of programs
• Services offered
• Service goals
• Fees
• Building and grounds
• Construction contracts
• Facility planning
• Maintenance requirements
• Management
• Authority delegated to Executive
• Evaluation and compensation of Executive
• Finances
• Service contracts
• Bidding procedures
• Audit
• Budgeting