I'll be discussing board committees and other committees with Tony Martignetti on NonprofitRadio tomorrow at 10:30 am PST / 1:30 pm EST. Please join us and Tony's 9,000 other listeners live on Talking Alternative. Or catch the recorded podcast on iTunes.
While I'm not certain where the conversation may go, we may be discussing issues like:
- Why do nonprofits have committees?
- Can a nonprofit have someone who is not a board member on a board committee?
- What's the difference between a committee and an advisory board? How about a task force?
- What's the difference between a standing committee and an ad hoc committee?
- How much authority can a board delegate to a committee?
- How do committees take action?
- How do committees document their actions?
- How do boards exercise oversight over committee actions?
- Should every nonprofit have an executive committee?
- Should every nonprofit have an advisory board or advisory committees?
- What other committees should a nonprofit have?
Check out some of our other posts on committees:
Everything You Wanted to Know About Nonprofits & Committees
Advisory Board v. Board of Directors – A Distinction with a Difference
The Finance Committee: What is it and What Does it Do?
Human Resources Committee
Background: Fiduciary Duties
Under the Model Nonprofit Corporation Act (Third Edition), the board of directors is the group of individuals responsible for the management of the activities and affairs of the nonprofit corporation, regardless of the name used to refer to the group. Generally, all corporate powers must be exercised by or under the authority of the board of directors of the nonprofit corporation, and the activities and affairs of the corporation must be managed by or under the direction, and subject to the oversight, of its board of directors.
Each director, when discharging the duties of a director, must act: (1) in good faith, and (2) in a manner the director reasonably believes to be in the best interests of the nonprofit corporation. In addition, the directors, when becoming informed in connection with their decision-making function or devoting attention to their oversight function, must discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances.
In discharging board or committee duties, a director who does not have knowledge that makes such reliance unwarranted may rely on the performance by certain individuals to whom the board may have delegated, formally or informally by course of conduct, the authority or duty to perform one or more of the board’s functions that are delegable under applicable law.
A director may be liable to the nonprofit corporation or its members for a decision to take or not to take action, or a failure to take any action, as a director, if the party asserting liability in a proceeding establishes, inter alia, that the challenged conduct consisted or was the result of:
- A decision as to which the director was not informed to an extent the director reasonably believed appropriate in the circumstances; or
- A sustained failure of the director to devote attention to ongoing oversight of the activities and affairs of the corporation, or a failure to devote timely attention, by making (or causing to be made) appropriate inquiry, when particular facts and circumstances of significant concern materialize that would alert a reasonably attentive director to the need therefor.
For smaller nonprofit corporations in particular, directors who take on additional roles and responsibilities not related to their service as directors or members of board committees must exercise additional care and caution. Such roles may include serving as officers, employees, or program volunteers. Consideration of potential exposures, obtaining insurance coverage, and other risk management strategies should be reviewed with respect to such service. The standard of care and inquiry required to be reasonably informed may differ widely among the different roles assumed by an individual who serves as a director.