If you ask the general public, most will say that nonprofit board members will meet occasionally, discuss matters then walk away until called again to meet. While this is a common belief, it is quite incorrect.
The reality is that nonprofit boards have exhaustive responsibilities covering public and fiduciary obligations. In order for any nonprofit to ultimately be successful, roles must be created with descriptions attached, and those positions must adhere to the role descriptions as prescribed.
Like many organizations, nonprofits must remain accountable to their volunteers, donors, benefactors, and ultimately to themselves as well. This also includes being accountable for all aspects of the fundraising process.
In simple terms, a nonprofit exists to uphold the public trust. They must remain worthy of public support and be recognized by governmental agencies for the purposes of both trust and tax benefits associated with the nonprofit.
As for the board directors, their roles and responsibilities include providing oversight to ensure the organization's purpose is carried out, legal responsibilities to the nonprofit, and to ensure all ethical legislation has been addressed and met.
Nonprofit Boards Have Three Legal Obligations
Duty of Care
To provide discretion in all manners of spending. Boards must ensure the smart use of all assets and that goodwill is used toward the facility and the people involved with the mission.
Duty of Loyalty
Each and every transaction made in the nonprofit must be accountable and only completed in furtherance to the organization's mandate and mission. This includes the recognition and disclosure of any and all conflicts of interest as either a nonprofit or as an individual member for the nonprofit organization. All decision-making must be done with the sole best interest of the charity in mind. No one member supersedes the needs of the organization.
Duty of Obedience
All laws must be obeyed. All regulations governing charitable status must be adhered to. Internal by-laws will be created to support the bigger picture nature of legal obligations.
Determining the organization's mission and purpose
It is incumbent upon the nonprofit to show all persons connected that the purpose for the existence of the nonprofit is understood and justified. This is most often accomplished by issuing a mission statement.
Selecting the CEO, Managing, or Executive Director
This person will be the public face of the organization. They will determine the steps to be taken with respect to directing the nonprofit toward maintaining solvency and trust. While this is a senior, vital role to the nonprofit, it does not release any of the board members from their obligations. Now more than ever, the board must maintain contact with the organization as they will need to assess the executive's performance regularly as this remains a board function as well.
Organizational planning process
As is often the case, nonprofit boards will insist on thorough organizational plans to be prepared and submitted without any room for error. The bottom line is that all board members have made a commitment, and it is vital that they see this in the form of an organizational planning strategic plan document. It is imperative to know who does what throughout the organization.
This plan is not a one-time occurrence. It must be regularly submitted or changed as events require it to be amended. This needs to be recorded in the change management plan as well.
Determining program lifecycles
One of the fundamental roles of the board includes whether current and proposed programs are in line with the mission, purpose, and vision of the organization. There may be competing priorities, and while this is normal, it will ultimately be the board that will decide the fate of a particular program. It may be moved forward, scaled up or down, and or simply revoked or declined at the time of review.
The board must be able to self-reflect and self-assess
In short, the board needs to be its own court-of-appeal to self-regulate. Managing the grievance and governance process, any challenges to established processes or practices will all require the board to oversee the creation of standards of practice or procedure. This is to ensure all people involved with the nonprofit follow the guidelines set forth by the documents.
Expect the unexpected
Board members should be made aware that there may be other expectations of their participation with the nonprofit. Whether it is being asked to be an advocate, fundraise, and planning for succession are all general obligations for any board position.
Most often, a board member will sit on at least one committee. By performing this function, the board member will expect any presentations, etc. to reflect their expectations. It is advisable to structure the committee accordingly with one chair or a co-chair setup. All presentations, recommendations, or results will be made to this group with time left for Q&A from the board member.
It is critical that the board oversees all documentation related to agendas and minutes of meetings. The secretary (scribe) would have had the initial responsibility to record the meetings formally. Still, it is the responsibility of the board itself to maintain any meeting documentation and ensure its accuracy. Should any claims or potential legal issues come to the organization, these documents will be used in defense of the nonprofit.