Overview of Nonprofit Board Governance

Feb 21, 2007

A non profit’s board of directors has several important responsibilities to fulfill. This article reviews basic non-profit board governance.

A board of directors is the governing body of a non-profit organization. It has many serious responsibilities, which can be loosely categorized as follows:

1. Setting the policy for the organization. This is done by:

• Creating or updating the mission and vision statements.
• Determining the organization’s programs and services.
• Approving the strategic plan.

2. Monitoring the organization’s operations:

• Hiring and periodically evaluating the organization’s executive director.
• Working with and providing support to the executive.
• Approving the annual budget, annual report, etc.
• Approving major contracts and grants.
• Soliciting and reviewing program evaluations.
• Troubleshooting as necessary.

3. Serving as a public figure for the organization

• Fundraising, by directly donating to the non-profit and soliciting donations from others.
• Advocating for the organization.

4. Fulfilling other board responsibilities

• Documenting policies and decisions to create an organizational memory.
• Preparing for and attending board meetings.
• Researching and discussing issues before decisions are made.
• Replacing and orienting board members when a vacancy arises.

A board of directors also has certain legal obligations, known as duties. While the details may vary from state to state, here are some common legal responsibilities for members of non-profit boards to:

• Take reasonable care when making decisions for the organization (called “duty of care”)
• Act in the best interest of the organization (called “duty of loyalty”)
• Act in accordance with the organization’s mission (called “duty of obedience”)
• Stand aside when there is a conflict of interest (called “recusal”)

While there a board has many responsibilities, there are also things it should avoid. Basically, board members should avoid being over- or under-involved. More specifically, the board of directors should not:

• Concern itself with the day-to-day management of the organization. That is the executive director’s job.
• Rubber stamp decisions. While the board should take the recommendations of the organization’s director, staff, and members into consideration, the board needs to be an independent decision-making body.

More on Non-profit Boards of Directors:

• Creating a Board
• Board Bylaws
• Board Officers
• Board Subcommittees 

The copyright of the article Non-profit Board Responsibilities in Non-Profit Governance is owned by Estela Kennen. Permission to republish Non-profit Board Responsibilities in print or online must be granted by the author in writing.