Do you know the Board of Director’s Role for Your Nonprofit?
The board of director’s role in an organization can make or break it. Individual directors (and boards as a whole), play key roles in the success of a nonprofit agency. Yet two of the most overlooked steps in building an effective board are: 1) drawing in the right people, and 2) providing the best training/orientation to new members.
Throughout my decades of nonprofit involvement, these important steps continue to be issues in building a great board. Perhaps some leaders simply don’t fully grasp all of the responsibilities and roles of the board. Maybe they don’t understand how helpful — and critical — a competent board is in moving an agency forward.
A board and its directors ability to fulfill their roles and responsibilities can be the difference between 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 must remember directors sometimes wear different hats when serving at an agency. 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 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 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 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.
10 Responsibilities For Your Board Of Directors:
- 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.
- Selects, 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 Director’s Role
Let’s explore the various roles directors may play in order to meet the expectations placed on them. Some of these roles may be shared with staff or volunteers (fundraising, marketing, and advocacy) while others are non-delegable and must be done by them.
12 Things the Board of Director’s 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’re 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 director’s role (and responsibilities) in a nonprofit can be a challenge — a big challenge.
This job 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 getting new board members off on the right track, and providing direction for existing board members.