Nonprofit Board Governance and Responsibility
It is important that nonprofits have a strong organizational structure. This structure is built by a group of dedicated individuals known as the board of directors. The board of directors is the governing body of a nonprofit, each serving in a voluntary capacity. Board members are responsible for duties of care, loyalty, and obedience to the nonprofit. As a governing body, the board of directors focuses on the organization’s mission, strategy, and goals and provides direction and oversight for the organization and its activities.
Governance and Fiduciary Responsibilities Include:
- Defining the organization’s mission and purpose.
- Selecting the executive director.
- Providing financial oversight and maintain accountability.
- Ensuring adequate resources are available.
- Ensuring legal and ethical integrity of organization practices.
- Developing an effective strategic plan.
- Recruiting and onboarding new board members.
- Safeguarding and enhancing the organization’s public image.
- Determining, monitoring, and strengthening the organization’s programs and services.
- Supporting the executive director and evaluating his or her performance.
Number of Board Members and Board Terms
Based on your state law, you will be required to have a minimum number of directors; usually either 1, 3 or 5 directors. However, most nonprofit councils recommend no fewer than 3 directors. Funding organizations may also require a minimum number of directors to be eligible to apply for their grant.
To view the minimum number of directors required, visit your State Corporate Licensing Office. In most states, this is your Secretary of State Corporation’s Division. Or check out Harbor Compliance website page “Nonprofit Governance by State (Links to an external site)”, where you can quickly view information for all states.
In addition, your Bylaws should address the minimum and maximum number of directors and term duration. Board memberships are not permanent positions; most organizations have terms which typically fall between two and five years.
When considering a new board member, it’s best to:
- Invite them to attend a couple of meetings to learn more about the organization and how the board operates
- Thoroughly vet this person to ensure that they share the organization’s mission
- Ensure that they have the time to dedicate to serving
- Agree on what “serving” on your board means and involves
- Ensure that they understand that nonprofit board members are not shareholders and do not receive compensation
- Ensure that they are willing to attend board meetings, fundraisers and events and share in the preparation of meetings, fundraisers and events
- Ensure that they serve in roles that they are qualified for based on their education, experience or a combination of both
Board Roles and Responsibilities
Nonprofit organizations have officers, usually from among the board members, who are given a higher level of responsibility. These individuals serve terms just like general board members. Officer roles are of President, Secretary, and Treasurer. Some organizations prefer the term “Board Chair” rather than “Board President”.
The Board Chair or President heads up the board and supervises all of the business and affairs of the board.
The Board Secretary keeps the minutes of the board of directors, keeps track of the organization’s activities to make sure the actions of the organization are in accordance to the organization’s Bylaws, and updates the contact information for all board members. The Secretary also informs the board about meetings and updates on the organization.
The Treasurer is responsible for keeping track of the organization’s finances, accounts and bookkeeping. The treasure keeps the board members informed about the financials.