Do you know the Board of Directors Role for Your Nonprofit?
The board of directors role in an organization can make or break it. Many will agree that individual directors and boards as a whole, play key roles in the success of a nonprofit agency. And yet two of the most overlooked and potentially challenging steps in recruiting and building an effective board, are not drawing the right people to the board, and not providing the best training/orientation to new board members.
Throughout my decades of being involved with nonprofits, this issue continues to be a much misunderstood step in building a great board. Perhaps some leaders simply don’t fully grasp all of the responsibilities and roles board members and boards play. Maybe they don’t understand just how helpful — and in my opinion critical — a competent board can be in moving an agency forward.
With that in mind, I want to share some thoughts on how clarifying the board of directors role, and responsibilities of the board in general — to your new board candidates and your current board members, will take your nonprofit agency to new levels of community impact and effectiveness.
A board and its directors ability to effectively fulfill their roles and responsibilities can mean the difference between being a high impact agency, a low impact agency, and one that eventually has to shut its doors.
Now, let’s dig deeper into the major roles and responsibilities of directors and boards.
First, we need to remember that directors sometimes wear different hats when serving at your agency. In addition to being a director they may also be a volunteer. This is most common in smaller or startup nonprofits. For today’s discussion, we will limit our focus to when they are acting in their role as director.
Legally there are duties imposed on boards and directors for a nonprofit. I strongly recommend you consult an attorney you trust to make sure your board is meeting this minimum level of responsibility.
These legal duties include the duties of Care, Loyalty, and Obedience. These terms may strike you as overly broad and all encompassing, and in one sense they are. Boards and directors are expected to operate from a position of trust, or as a fiduciary, in carrying out the business of the agency. Let’s dig a bit deeper…
What are these duties?
Duty of Care: Boards and directors are expected to exercise reasonable care in carrying out their duties. They must meet the standard of what other reasonable people would expect of them, or they themselves would do if in the same or similar situations.
Duty of Loyalty: Boards and directors must make their decisions based on what is in the best interests of the organization. This includes avoiding conflicts of interests and avoiding any obtaining personal gain through board service. First loyalty is to the agency.
Duty of Obedience: Boards and directors must adhere to all applicable government laws and regulations, its own bylaws, and must remain true to its stated mission.
Responsibilities: Let’s get more specific and review how boards and directors fulfill their roles and meet these duties. There may be different ways boards and directors operate to meet its responsibilities but they all must strictly adhere to these three duties. Size, established policy, past customs, etc may define local approaches to meeting these responsibilities.
Here are 10 Responsibilities for your board of directors:
- Responsibility to set direction, establish policy, monitor progress and compliance.
- Manage only one employee—the chief executive or executive director. Effective boards are not staff or volunteer supervisors and should not involve themselves in day-to-day activities. One exception MAY be start-up or “operational” boards where it usually is “all hands on deck”.
- Approve (and often participate in the setting and creation) of the organization’s mission, vision, values, major strategies and major goals/outcomes. As mentioned above, the board then holds the chief executive accountable for developing a staff implementation plan based on these policy decisions.
- Establish the parameters within which the chief executive is expected to achieve the goals/outcomes.
- Monitor the organization’s performance towards the approved goals/outcomes.
- Promote transparency, accountability, and sustainability.
- Select, fairly compensates, nurtures and evaluates annually, a chief executive officer or executive director.
- Ensure financial solvency and integrity through policies and oversight.
- Require periodic financial and legal external audits to ensure compliance with the law and sound practices.
- Evaluate and constantly improve the board’s structure and process, holding the chair accountable for managing the board with integrity.
That’s a lot… and it might sound a bit daunting. How can you make it easier? By understanding the actual role(s) your board and individual members play, in moving your organization forward. To put it simply… what should they actually be DOING?
Understanding the board of directors role.
Let’s explore the various roles directors may play in order to meet the legal and other expectations placed on them. Some of these roles may be shared with staff or volunteers like fundraising, marketing, and advocacy while others are non-delegable and must be done by them.
Here are 12 things the board of directors role may include:
- Fundraising / generating needed funds.
- Marketing and Advertising.
- Outreach, community relations, and serving as agency ambassadors.
- Risk Management — assuring the organization itself is properly protected while carrying out its mission.
- Using their unique professional skills to help advance the organization, like CPA, attorney, social media expert, etc.
- Fill and serve on board committees, such as
- Fund Development
- Governance/Board Development
- Ad Hoc committees, as needed
- Identifying and recruiting qualified candidates for future board service.
- Strategic thinking.
- Protecting the organization’s mission/vision/values.
- Insuring effectiveness in the organization’s programs.
- Supporting the chief executive officer/executive director in his/her efforts.
- Advocating and informing others about important related issues.
Overwhelmed? That’s completely understandable. If it seems like there are a lot of moving parts here you’d be right.
Where successful boards separate themselves from the rest of the pack is in how they balance all of these facets at once. Clearly defining the board of directors role (and responsibilities) in a nonprofit can be a challenge — a big challenge.
It requires running effective board and board committee meetings and holding directors accountable for their commitments. It requires up front effort, and ongoing communication. It requires strategic thinking on the part of the chief executive or executive director. And it requires patience and effort to implement and nurture.
But I promise you, it’s worth it.
Need a little help to get you started?
Download the 20 Critical Components for New Director Orientation.
Helpful for not only to get new board members off on the right track, but very effective for providing direction and clarity for existing board members.
IS YOUR MISSION POSSIBLE?