One of my favorite things about our work is the opportunity to speak to boards about their roles and duties. A nonprofit’s board members are one of its most underutilized and important assets. We believe most board members genuinely want to contribute in a manner that will best help their organizations but they are challenged by existing board structures and cultures that do not facilitate such contribution and a lack of knowledge on how to exercise their duties. Empowering board members and activating board engagement may require more than a single presentation, but it’s nice to be able to catalyze the process.
The Board’s Roles
- Direct – chart the course, stargaze (thanks to Lucy Marcus for coining the term). The board must direct the course of the nonprofit on a path to effectively and efficiently further its mission, in a manner consistent with its core values, with an appropriate level of risk tolerance and focus on both the short-term and long-term.
- Oversee. The board must provide oversight over the financial performance and health of the nonprofit, but that’s not all. Nonprofits don’t exist to produce healthy financial results; they exist to further a charitable mission. So, the board must provide oversight on the programs and activities to determine whether they are producing an acceptable result. Determining the right criteria on which this determination is made is critical. Board must also oversee the performance of the executive and others to whom authority has been delegated. Finally, boards must oversee the organization for legal compliance and appropriate risk management.
- Protect. The board must protect the charitable assets of the organization and take steps to ensure they are not wasted, misused, or diverted. The creation, implementation, and enforcement of policies are keys to fulfilling this role.
Meeting the Board’s Duties
Board members each have a duty of care and duty of loyalty to act with reasonable care and good faith in the best interests of the nonprofit. Collectively, the board members should:
- Develop a sound organizational strategy. The process may be aided by regularly considering generative questions, including whether the nonprofit’s programs are the right ones and whether the board’s involvement is appropriate in the proper governance of the organization. Tips:
- Plan with a focus on the mission.
- Ensure there are adequate resources to execute.
- Develop and enforce policies.
- Monitor for developments requiring change.
- Change strategy when appropriate.
- Delegate. The key is delegating with care, subject to appropriate limitations and appropriate oversight. Tips:
- Pick the right people.
- Give them the right tools.
- Don’t micromanage; do oversee.
- Hold responsible persons accountable.
- Evaluate persons with delegated authority
- Ensure productive and well-attended board meetings. Tips:
- Ask for information.
- Review information in advance.
- Attend regularly and contribute actively.
- Exercise independent judgment.
- Keep proper records (minutes).