10 Basic Responsibilities of Board Members

10 Basic Responsibilities of Board Members

Nonprofit boards are comprised of volunteers who come from a rich variety of backgrounds. They have different talents and skills as well as a range of personal and professional experience.  

The ideal nonprofit board has a diverse membership. It should be comprised of people of a range of ages, genders, cultures, political beliefs as well as different economic, educational and professional/nonprofessional backgrounds. Your nonprofit board should reflect the diversity of your community. And, if your is focused on human services, it may be beneficial for your board to mirror the diversity of the people you serve. Finally, it is a great idea to have seasoned members with several years of board experience, and some members who are serving on a board for the first time.

All volunteer board members also have some things in common. They give of their time, skills and (sometimes their money!) without expectation of being compensated. Board members must feel a “heart connection” to the cause, mission and services provided by your nonprofit. Most volunteers who join a board do so to make a difference in their community and in society.

Canada is approaching 180,000 incorporated nonprofit organizations from coast to coast to coast. These nonprofits range from small, grassroots and volunteers-driven (no employees) who are drawn together to address a specific issue or need … to large national and international organizations with substantial financial resources, many employees creating great influence and social reach on a large scale.

According to provincial/territorial and national regulations, every incorporated nonprofit must have a board of directors. Each board must decide what type of board it would like to be. There are three types of nonprofit boards:

• A policy governance board (sometimes called Carver-style) that is hands-off, delegates day-to-day operations to a paid senior managers and creates executive limitations and reporting rules to ensure accountability.
• A policy board that sets governance policies and strategic direction and that delegates responsibility for operations to a paid senior manager (often called an executive director or chief executive officer) who reports to the board regularly.
• An operational or hands-on board in which board volunteers do most of the work, manage operations, provide direct services usually without the involvement of any paid employees.

The roles and responsibilities of   board members are different for each type of board model and structure.

The most frequently chosen board model in Canada is a “policy board” (#2 above). So, let’s explore a bit future the 10 basic responsibilities of board members who serve on a policy board.

#1          Stick to governance and stay out of day-to-day operations. Board members and the paid ED/CEO are partners. The board must create governance policies (how the board will manage itself), set strategic direction, hires, supports and holds the ED/CEO accountable, ensure stewardship of funds and delegates all operational responsibilities to their ONE employee, the ED/CEO. The most essential of all these responsibilities is for board members to develop a comprehensive set of governance policies that guides the activities of the board. To paraphrase, John Carter an effective policy board, “puts its arms around not fingers in” the organization.

#2          Establish ways of ensuring the ED/CEO is held accountable, without becoming involved in operations.  I like to call this process, “Trust but Verify”. (You can grab my free video workshop on this topic, follow this link: https://videos.learningforleaders.ca/3-free-board-videos)  

ED/CEO accountability requires:

• a clear position description for the ED/CEO
• Key performance Indicators (KPIs),
• regular provision of financial data by the ED/CEO to the board
• monitoring of progress toward a strategic plan
• annual performance appraisals (using a written, board approved 360-degree PA process)
• regular employee satisfaction/engagement surveys with summary data and management action plan shared with the board
• monitoring licensing or accreditation of services and facilities
• regular service/program audits or evaluations.

#3          Speak with one voice through board consensus or formal motions. Each member is part of the greater whole. On a board with 10 members, each will different opinions and ideas. A valuable as this is, the board clearly cannot go off in ten different directions! It must work to create group agreement (consensus) to make decisions, set policy and give direction to the ED/CEO and organization as a whole. When necessary, the formalizes decisions in via motions that are approved by majority vote.

#4          Ensures the continuation of the organization’s programs and service by securing and monitoring financial resources. A policy board delegates all operational responsibilities to paid senior leaders. However, the board remains responsible for ensuring that the organization has sufficient financial resources to continue operations. The board fulfills this responsibility by:

• approving annual operational and capital budgets
• participating in fundraising activities
• establishing a policy for accumulation of cash reserves to bridge any financial crisis or loss of funding
• ensuring the organization has a diverse base of funding from a variety of public and private sources.

#5          Ensures that programs and services are aligned with and meet community needs. The “community” of a nonprofit may be defined in many ways. For example, it may be a group working collectively to find a cure for a rare disease. Or, it may be defined by a geographical area, such as a town, city, region or province. Its community may also may be diverse and broadly dispersed, as is the case with international organizations such as YWCAs or YMCAs. The nonprofit exists to understand and meet the need of its community(s), however they are defined. It is the role of each board member to be the eyes and ears of the community in recognizing and bringing forward potential needs. It is also their role to periodically initiate an program and service audit to determine whether the nonprofit’s current services are having the desired impact and are making the best use of resources.

#6          Duty of Loyalty. Regardless of how a member’s personal opinions may vary from the policies or practices of the organization, each member must speak and act positively about the organization. If they cannot be loyal, then they should resign from the board. In addition, each member must put the best interests of the organization ahead of their own personal or professional interests when considering issues, setting direction and making decisions at board meetings. When a member determines that they or another member may have a “conflict of interest” and cannot be loyal to the nonprofit’s interests, they must remove themselves from all discussions and decision-making on the issue. This allows the board to have open discussions and to act reasonably and responsibly without any interference or other agendas being brought into play.

#7          Duties of Care and Diligence. Each board member must also be diligent and careful when considering issues and making decisions at a board level. This means they must ask questions to fully understand issues and implications of decisions or directions the board may take. Not all board members have the same knowledge or expertise. In some cases, expert advice legal, financial or other advice may be needed. This could be available from other board members or may need to be sourced from outside the organization.

#8          Participate in creating succession plans for the board, for board executive leadership and for the ED/CEO.  The board must create policy and practices that ensure it abides by term limits for board members (usually these are specified in the bylaws). Each member must help the board find new members to replace outgoing members who have resigned or who have completed their maximum term. It is also a board member’s duty to participate in leadership roles. This may be taking on an executive position (chair, vice-chair, treasurer or secretary) or chairing or participating on committees. In addition, the board must plan for the succession (sudden or anticipated) of the ED/CEO. External consulting support for these planning processes is highly recommended. For more information, please reach out to Paula MacLean at learningforleaders.ca.

#9          Ongoing board development and education.  With the support of the ED/CEO, each board member must attend and participate in regular educational activities that strengthen their understanding of their roles as a board member. This training may be embedded in regular board meetings (e.g., guest speakers), attendance at conference or group training events, online education (check out https://videos.learningforleaders.ca/3-free-board-videos) or reading of relevant articles or books (my bestselling book “Great Boards Plain and Simple” is also available at learningforleaders.ca

#10        Regularly evaluate board functioning, impact and efficiency. The best boards engage members in regular evaluation of the efficiency of board meetings and of the quality of policies and leadership practices of the board. In addition, board bylaws and governance policies should be reviewed every three to five years and revised or updated if necessary.