BOARD OF DIRECTORS - General Overview
The Board of Directors is Responsible for:
- Creating and reviewing a statement of mission and purpose that articulates the organization's goals, means, and primary constituents served.
- Fulfilling the fiduciary, oversight, strategic and governance tasks of the organization.
- Creating policies and procedures for their own governance and evaluation.
- Determining which programs are consistent with the organization's mission and monitoring their effectiveness.
- Ensuring effective organizational and strategic planning.
- Selecting, supporting and assessing the chief executive (at some point in the future).
- Recruiting and orienting new board members and assessing board performance.
Provide proper financial oversight. The board must assist in developing the annual budget and ensuring that proper financial controls are in place.
- Set budget based on program needs and projected revenues
- Review income and expense statements
- Develop and review investment, disbursement and endowment policies
- Review annual audit
- Develop financial policies to protect organization resources
The Board ensures legal and ethical integrity and maintains accountability. The board is ultimately responsible for ensuring adherence to legal standards and ethical norms. Under well-established principles of nonprofit corporation law, a board member must meet certain standards of conduct and attention in carrying out his or her responsibilities to the organization. Several states have statutes adopting some variation of these duties which would be used in court to determine whether a board member acted improperly. (Board members are insured by the organization).
- Duty of Care: describes the level of competence that is expected of a board member, and is commonly expressed as the duty of "care that an ordinarily prudent person would exercise in a like position and under similar circumstances." This means that a board member owes the duty to exercise reasonable care when he or she makes a decision as a steward of the organization.
- Duty of Loyalty: a standard of faithfulness; a board member must give undivided allegiance when making decisions affecting the organization. This means that a board member can never use information obtained as a member for personal gain, but must act in the best interests of the organization.
- Duty of Obedience: requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission.
One of the Board's responsibilities is to provide adequate resources for the organization to fulfill its mission.
- Actively participate in the fundraising role of Justice Initiatives (JI) to secure financial support from others (including annual funds, endowed funds, special events, planned giving and any potential capital campaigns).
- Contribute annual financial support to JI at a level commensurate with capacity and interest.
- Represent the organization in the community at large and act as an ambassador to for the Court with elected bodies. Enhance the organization's public standing. The board should clearly articulate the organization's mission, accomplishments, and goals to the public and garner support from the community.
Policies are the operational guidelines for an organization. The purpose of having policies is to protect and steer board and staff as they fulfill the organization's mission. Policies provide a reference tool for appropriate action, ethical decision making, and for managing potential or actual conflicts. Policies can paraphrase a law, explain a procedure, clarify a principle, or express a desired goal. They are the protocol to follow which, when properly used, helps diminish embarrassing or potentially harmful situations, improper behavior, and ineffective decision making. An organization usually has board-related, personnel, and financial policies. Process for developing new policies includes being proactive, teamwork and research.
- Board Related Policies: Eligibility, Powers and Duties, Election of Officers, Conflict of Interest, Confidentiality, Compensation, Reimbursement (travel and expenses), Personal Contribution, Meeting Attendance, Indemnification, Diversity, Term Limits, Removal from Office, Nepotism/Fraternization, Media/Public Relations.
- Personnel Policies (at some point in the future): Equal Employment, Anti-harassment, Substance Abuse, Performance Review, Personnel Files, Working Schedules, Compensation and Benefits, Disciplinary Issues, Nepotism, Personal (i.e., appearance, phone/email or Web usage).
- Financial Policies: Investment, Gift Acceptance, Audit, Signing of Checks, Endowment Management, Use of Credit Cards, Check and Cash Requests.
- BoardSource Knowledge Center (2008). From www.boardsource.org
What are the basic responsibilities of nonprofit boards?
What are the legal responsibilities of nonprofit boards?
What are the responsibilities of individual board members?
- Association of Fundraising Professionals Resource Center (2007). (www.afpnet.org)
- The Center on Philanthropy at Indiana University (2002).
Developing Leadership for Major Gifts Course workbook