Board Versus Executive Director Responsibilities
Posted on Wednesday, January 28, 2015
There are two types of nonprofit boards, working boards and governing boards. On a working board, members participate in the program, fund raising and administrative work. Board members may staff fund raising booths or actually keep the organization’s books. Working boards are more common in smaller organizations or young organizations. Governing boards are more hands off and provide oversight.
No matter whether it’s a working board or a governing board, there are specific duties that all boards have, as the board is ultimately responsible for the organization.
The board is responsible for providing financial oversight. This is done through approving the budget, reviewing and understanding financial statements and making sure the organization is in compliance with grants.
In addition to making sure the organization is in compliance with its tax exempt status and making sure all required tax filings have been made, the board has 3 fundamental legal duties.
- Duty of care – To exercise reasonable care when making decisions as a steward of the organization.
- Duty of loyalty – To act in the best interest of the organization.
- Duty of obedience – To be faithful to the organization’s mission.
While the board should not be involved in the everyday operations of the organization, there are some management responsibilities that fall on the board. The most significant role is that of hiring and evaluating the Executive Director. Other management responsibilities include approving the mission, bylaws, articles of incorporation and other policies and procedures.
The board of directors usually has committees (finance, planning, human resources, etc.) to help accomplish all of its responsibilities. Committees must recommend action to the full board for approval. Only the board of directors as a group can ultimately make decisions for the organization. Individually board members have no power.
Beyond the required financial, legal and management responsibilities of board members, each organization has set expectations for board members. These usually include attending board meetings, serving on a committee, attending special events, making a significant contribution to the organization, acting as an advocate for the organization in the community, supporting fund raising efforts, etc.
There are some areas that board members should not get involved in that should be left to the Executive Director. The most significant area is the everyday operations of the organization. Other responsibilities of the Executive Director include:
- Hiring, supervising and evaluating staff
- Developing and implementing programs
- Fund raising
- Preparing an annual budget
- Financial reporting
- Acting as a liaison between the board and the organization
Of course in order for an organization to be effective, the board of directors and the Executive Director must work together. There are specific tasks such as strategic planning where both parties must actively participate.
Posted by: Carrie Minnich, CPA
Posted in Mission Minded Nonprofits
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