A board of directors is the ultimate authority of a nonprofit corporation, but that doesn’t mean any individual director (board member) holds such authority or really any inherent authority over the corporation, subject to some very limited exceptions. The following lists of board member rights and non-rights are based on laws applicable to California nonprofit public benefit corporations but may serve as general guidance for any board member.
Rights of a Board Member
- To vote on each matter presented to the board for action.
- To take actions on behalf of the corporation, but only if duly delegated with such authority (typically by the board or executive).
- To have the means of communicating with all other board members concurrently at any board meeting.
- To have the means of participating in all matters before the board, including, without limitation, the capacity to propose, or to interpose an objection to, a specific action to be taken by the corporation.
- To, at any reasonable time, inspect and copy all books, records and documents of every kind (while this is framed in the corporate law as an absolute right, it’s probably subject to conflicting privacy laws that may take precedence).
- To, at any reasonable time, inspect the physical properties of the corporation.
- To receive an annual report, which shall include any required statements of certain transactions and indemnifications required to be disclosed to the board members.
- To identify oneself as a board member and, to the extent authorized, act as an ambassador and fundraiser for the organization (most commonly through private communications with others).
- To sue derivatively on behalf of the corporation a third party, including one or more other directors.
- To sue the corporation for certain violations of law.
Non-Rights of a Board Member*
* unless duly delegated with such rights
- To order the executive or any of the corporation’s employees to take a particular action.
- To enter into a contract on behalf of the corporation.
- To expend corporate funds.
- To use the corporation’s assets, particularly for their personal benefit.
- To have their vote at a board meeting count for purposes of approving a self-dealing transaction (under state law) in which the board member has a material financial interest.
- To make any public announcements on behalf of the corporation, particularly if they are outside of the corporation’s approved messaging or in violation of any contractual or fiduciary obligations of confidentiality.
- To divulge any confidential or protected information acquired through their position with the corporation.
- To usurp, for the board member’s own benefit, any corporate opportunities intended for the corporation.
- To act unlawfully in carrying out any delegated responsibilities.
- To participate in a board meeting in a manner that is intended to be disruptive, disrespectful, or otherwise for their personal interests ahead of the corporation’s interests.
While an individual board member may have limited inherent rights, they have important fiduciary duties and responsibilities. And, of course, collectively, as the board of directors, the board members are ultimately responsible for directing and overseeing all of the activities and affairs of the corporation and the exercise of corporate power. See:
Additional Observation from Readers
- Non-right of a board member: to vote at a board meeting by proxy