Board Versus Committee Responsibilities

Posted on Wednesday, March 27, 2024

All nonprofit organizations are required to have a board of directors. Most organizations also have several committees to focus on more detailed work and allow the board to focus on more important issues. Committees vary with organization; however, most have an executive, governance, finance/audit, development, and program committee.

Executive Committee

The executive committee normally consists of the board officers. Sometimes it may also include an at-large member but usually only consists of current board members. The executive committee is empowered to exercise the authority of the full board on decisions that must be made in between scheduled board meetings. The executive committee can also act in an emergency whenever a quick decision may need to be made, and it is not practical to call a full board meeting.

Another common duty of the executive committee is the determination of the executive director’s compensation and performance review or succession planning. Often times a closed session of the executive committee, without the presence of the executive director, is held to discuss confidential and sensitive issues such as these.

Governance Committee

Governance committee responsibilities include the following:

Develop and maintain board policies and procedures.
Review and recommend changes to the bylaws.
Recruit, nominate, and evaluate potential board members.
Conduct new board member orientation sessions.
Provide continuing education for current board members.

Finance/Audit Committee

Many organizations have an audit and finance committee that includes financial experts, who may not be board members, to assist in providing the needed financial oversight. Some organizations are not able to have both an audit committee and a finance committee, so the finance committee assumes the role of both.

If your organization is able to have both an audit and a finance committee, they should. Even though both committees’ responsibilities are financial in nature, their roles are different. Finance committee members who understand financial reporting may not be knowledgeable of audit requirements or internal controls. Having an audit committee also demonstrates to the public that the organization recognizes the importance of the audit process and compliance. Having two committees will require additional committee members but the benefits far outweigh the disadvantages of separating the responsibilities between two committees.

Audit Committee

Considers matters related to the financial statements and other financial information provided to the public.
Reviews the systems of internal controls (policies and procedures, risk management).
Ensures financial reports are received, monitored and disseminated appropriately.
Engages the auditor and oversees the audit process (meets with the auditor, reviews the audit).
Reviews annual Form 990.

Finance Committee

Monitors financial transactions.
Oversee the preparation of annual budget.
Reviews financial statements
Advise the board with respect to making significant financial decisions.

Development Committee

The development committee often consists of both board and non-board members, especially those individuals that have experience in fundraising. The role of the development committee includes the following:

Develop and implement fundraising strategies and campaigns.
Identify and cultivate relationships with potential donors and sponsors.
Plan and execute fundraising events and initiatives.
Monitor and evaluate fundraising activities to ensure effectiveness.

Program Committee

The program committee also normally includes both board and non-board members. The role of the program committee is focused on the activities and programs of the organization. Because each organization provides different types of programming, the individuals serving on the program committee may require different skills or skills within a specialized area. For example, an organization providing medical services may benefit from having doctors or nurses on the program committee. This committee’s responsibilities include the following:

Oversee the planning, development, and evaluation of the organization's programs and services.
Monitor program outcomes and impact.
Ensure alignment of programs with the organization's mission and strategic goals.
Identify opportunities for program expansion or improvement.

The use of committees can be an efficient tool in dealing with issues that may be better solved within a small group instead of the full board. However, committees cannot act in place of the full board. There are also some responsibilities that cannot be shifted to a committee. All board members are responsible for the following:

Attend board meetings. Regularly attend and actively participate in board and committee meetings.
Review and approve the strategic plan. Participate in the development, review and approval of the organization’s plan and ensure the organization is on track.
Financial oversight. Review and approve budgets, financial statements, and audit reports, ensuring fiscal responsibility and transparency.
Legal and regulatory compliance. Ensure that the organization complies with all applicable laws, regulations, and ethical standards.
Fundraising and resource development. Contribute to fundraising efforts, including identifying potential donors, making personal financial contributions, and leveraging personal networks.
Board development. Participate in board recruitment, orientation, and ongoing training and development activities to ensure a diverse, skilled, and engaged board.
Executive oversight. Hire and evaluate the Executive Director and provide support and guidance to ensure effective leadership.
Risk management. Identify potential risks to the organization and develop strategies to mitigate them, including establishing appropriate insurance coverage and internal controls.
Community engagement. Act as ambassadors for the organization, representing its interests to the community and stakeholders.
Evaluation and continuous improvement. Regularly evaluate the organization's programs, services, and impact, and take action to promote continuous improvement and organizational effectiveness.
Conflict of interest disclosure. Disclose any conflicts of interest and abstain from voting on matters where a conflict exists, in accordance with the organization's conflict of interest policy.
Support and advocate for the mission. Support the organization’s mission, vision and values, and advocate for its interests.

Contributed by: Carrie Minnich, MAcct, CPA | Partner | DWD CPAs & Advisors

Posted in Mission Minded Nonprofits

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.