Congratulations! You’ve been recruited and elected to serve on a board of directors for your favorite nonprofit organization!
Now what?
Being a board member is an important and enjoyable way to give back to a community or organization that matters to you. The board of directors is tasked with ensuring that the organization carries out its exempt purpose. But what does that mean exactly?
You have three primary legal and fiduciary duties:
The duty of care means that you must take care of the assets of the organization, whether monetary, staffing, volunteers, facility, or goodwill. Be a good steward of the organization’s funds.
The duty of loyalty requires you to put the organization and its mission first. This includes recognizing and disclosing conflicts of interest, and making decisions that are in the best interest of the organization and not in the best interest of an individual board member or for-profit entity. It’s your job to make sure that the organization is working to fulfill its stated mission.
The duty of obedience covers your role in making sure that the organization follows all applicable laws and regulations, and its own bylaws.
What does this look like in practice?
As a board member, you are responsible for advancing the mission of the organization. I recommend reviewing your mission statement regularly, such as at every board meeting, so as to keep that mission at the forefront of your discussions. It is also important to track what other similar organizations are doing, whether in your area or across the country. If your organization is membership-based, it is helpful to keep communication open with your members. In a membership organization, you also “represent” the members.
If your organization has an executive director, the board of directors is responsible for hiring, setting compensation, and supervising this person. This is a key relationship, as the executive director typically manages the other staff and volunteers (directly or indirectly), fund raises with donors, and is often the “face” of the organization.
The board of directors is responsible for setting the budget for the year and overseeing that income and expenses stay on track. It is helpful to learn how to read and interpret financial statements, including profit/loss statements and balance sheets. Similarly, you are responsible to make sure the minutes and agendas are accurate, as this is the best legal protection should a potential issue arise. This is also a great time to brush up on Robert’s Rules of Order.
You are a walking advertisement for your organization. Spreading the word about your organization helps it grow, and part of the duty of care is to make sure your organization is growing. For most board members, this means sharing the mission with people you meet. For some, in can include public relations and talking with the media.
Board members should be involved in the work of the mission. This could be working on a committee, taking a lead role in a fundraising activity, or volunteering in another capacity. It’s hard to know if the organization is advancing its mission by reading a report. The more you are able to be a part of the work, the better you will be able to make decisions in the best interest of the organization.
Board members are fundraisers. This means both that you are contributing financially to the organization, and that you are helping to solicit donations too — whether by helping to put together a fundraising event or by asking the people in your network to contribute.
Lastly, board members are always recruiting new board members. It may seem odd to think about finding your own replacement as soon as you are elected, but many board members find that their time goes fast. Continual recruitment allows for greater continuity.
If you are welcoming new members to your board, I strongly recommend having an orientation to review their legal and fiduciary duties, your organization’s mission and bylaws, and their particular role and responsibilities. This should be an annual event, as you welcome new members every year, and separate from any all-board retreats that focus on long-term planning and mission.
If you are interested in setting up a new-members orientation and would like more information, please let me know.