Duties of a Nonprofit Board
I have worked with a lot of nonprofit board members and boards over the years. It still amazes me how many do not know their basic duties – both the board members and staff who work with them.
Quite simply, board members have three duties: Care, Loyalty, and Obedience from which their roles and responsibilities emanate.
The Duty of Care means that board members show up to required meetings and other functions, engage in those meetings by paying attention and asking good questions, use good judgement in all decisions and discussions, seek the information needed to make good decisions, and know and act upon their basic board responsibilities. In order to fulfill their duty of care, the board should not just trust that the staff has provided accurate and complete information, but question and independently verify that information.
The Duty of Loyalty means that board members must verbally disclose conflicts of interest and always act in organization’s best interest. A conflict of interest arises when the individual, their company, or family member can benefit financially or otherwise from a decision made by the organization. Just because a board member has a conflict of interest does not disqualify them from board membership. Instead, they have the duty to disclose that conflict and remove themselves from any discussion or decision from which they or a family member can benefit. For example, if you plan to build a new building and have a contractor on your board to provide great guidance throughout the building process, they cannot discuss who to hire or vote on who to hire.
The Duty of Obedience means that board members know and obey all laws governing nonprofits, know and adhere to all relevant ethical standards, and always act in accordance with the organization’s mission. Adhering to this duty assumes that board members know the laws and ethical standards that govern nonprofits and know and understand the organization’s mission. Having a legal professional on your board can help steer the board in the right direction when legal or ethical questions arise as will regular training on relevant legal and ethical standards. Printing the mission statement on your agendas or in the boardroom will help keep it front and center for all board meetings and discussions as will an annual review of the mission statement with discussions among board members and staff of what the mission means to them.
A well-functioning board requires that everyone understand their duties to the board and act in accordance. For the latter, the board must govern itself and its board members to assure that everyone adheres to these basic duties.
How well does your board follow its duties? What could you do better or differently to help your board fulfill these duties?