Role of the Board of Directors and How to Build a Board

What exactly is a board of directors in a nonprofit? Here is a definition of the board as it relates to a for-profit company. But when it comes to a nonprofit, priorities and responsibilities of a board of directors start to diverge.

What Board Members Do

Board members have the power to make real change in an organization. But it’s important to note this power only comes from the board as a whole, and not from each board member. Members of the board have no individual authority over the organization. Here are the primary focuses of the board as a whole:

• Guard the mission of the organization and, through guidelines, steer it in the right direction.
• Monitor the activities, health, and the ethical behavior in the organization.
• Ensure the organization is well-equipped to fulfill its mission, with adequate finances, capable staff, and an esteemed reputation.
• When hiring the first chief executive, daily management is delegated to that person. Maintaining regular contact with the board, and particularly the chair, the chief executive keeps the board informed about the issues and activities that are part of the life of the organization. In fact, the board would have great difficulties making well-rounded decisions without constant input from the chief staff person. The rest of the staff—in due time—will help the chief executive more efficiently implement the directives the board has set.

Building Your Board of Directors

So how do you go about building a board of directors in a nonprofit? Your board’s role will be critical within your organization. As you go through your list of potential candidates, consider the following:

1. Do the candidate’s contacts, network, and environments vary from but also complement the other directors? If you want to create an objective and unbiased board, then diversity is a necessity.
2. How interested is the candidate in your organization’s mission? They need to display meaningful concern for your organization’s advancement.
3. How well will they be able to separate possible differences between their individual business interests and the welfare of the organization? The less conflict of interest, the better.
4. Take a good, hard look at their value system and integrity. This may be hard to glean right away, but it is crucial to your organization’s health.
5. Can they be a team player? How well do they deal with differences of opinion?
6. On the flip side of working in a group setting, are they also self-sufficient and able to work well independently?
7. Can they listen, examine, and think clearly and imaginatively? Will they ask questions without hesitation?
8. What is their work ethic like? Will they be accountable to the expectation of attending board and committee meetings, and being adequately prepared? Can they take responsibility and complete their designated tasks?
9. Will they be willing to contribute personal and financial resources to the organization, and promote and seek outside funds?
10. What kind of ties do they have with the community? Do they have the ability to open doors in that community?
11. Can they recruit board members and other volunteers, should the need arise?
12. How adaptable are they? Can they develop other skills if the organization is in need of them, such as the ability to read financial statements?

Board Member Responsibilities

Once you’re done seriously considering the candidate’s abilities, personality, and potential, they need to be aware of certain responsibilities they’ll have in the organization. Consider the following board member expectations:

1. Participate in and attend all board and committee meetings and functions.
2. Stay current on board and committee matters, as well as review and offer feedback on minutes and reports.
3. Stay up to date on the organization’s mission, services, policies, and programs.
4. Be current on developments in the organization’s scope of interest. There is a willingness to serve on committees and suggestion to take on special tasks.
5. Be informed about any developments in the community, economy, or government that could potentially affect the organization.
6. Share in organizational fundraising.
7. Enlighten others about the organization.
8. Make personal financial contributions.
9. Suggest potential people to the board who have the ability to contribute to the work of the board and the organization.
10. Understand conflict of interest and confidentiality policies, and be subject to them.
11. Help the board by implementing fiduciary responsibilities, such as reviewing annual financial statements.
12. Participate in planning efforts and give feedback in yearly evaluations.

Check out this article on questions to ask when interviewing candidates for your board. Also, if you’re working for a nonprofit and looking for a way to manage your donors, check out Aplos’ donor management software. You can try it free for 15 days.

Free Recorded Webinar: Financial Training for Board Members

Although your mission is the main goal of your nonprofit, raising funds is necessary for growth and longevity, and having your board’s guidance is a big part of that. They act as trustee of your organization’s assets to ensure the organization is well-managed and remains fiscally sound. With this nonprofit board training, your board members can provide more effective governance and oversight of your nonprofit’s financial management policies and activities.

During this nonprofit board training webinar, we cover:

• Typical financial responsibilities and misunderstandings of board members
• Fundamental fiduciary duties for a nonprofit board and its members
• How to read, interpret, and understand the financial reports for the nonprofit you represent