Legal Duties of Boards
According to nonprofit corporation law, a board member MUST meet certain standards of conduct and attention to his or her responsibilities to the organization. These are referred to as the Duty of Care, Duty of Loyalty, and the Duty of Obedience
What does it mean if your board does not exercise these duties? What happens to the organization? To the individuals? For example, if board members do not ensure that payroll taxes for employees are paid to the Internal Revenue Service, they can be personally liable.
· Duty of Care: Board members must exercise due care in all dealings with the organization and its interests. This includes careful oversight of financial matters and reading of minutes, attention to issues that are of concern to the organization and raising questions whenever there is something that seems unclear or questionable. The courts have used the definition of how an “ordinarily prudent person would act.” Examples of this for you would be: 1) show up for meetings, 2) prepare ahead of time, 3) vote independently, 4) ask good board questions
· Duty of Loyalty: Conflicts of interest, including the appearance of conflicts of interest, must be avoided. This includes personal and professional conflicts of interest or conflicts with other organizations with which a board member is connected.
· Duty of Obedience: Obedience to the organization's central purposes must guide all decisions.
(More information on Duty of Care, Duty of Loyalty, and Duty of Obedience)
Conflict of Interest
An important responsibility of a board is to assure accountability for the club. Actions perceived to involve conflicts of interest (where personal or business benefits rather than the nonprofit's benefit are placed first) undermine public trust. Every board should have a signed conflict of interest statement from every board member (and probably every staff member).
Basic Board Responsibilities
For any board to operate effectively, it must be clear about its own responsibilities and about what responsibilities have been delegated to the staff. The board should not try to micromanage the affairs of the organization or to attempt to know everything that occurs. On the contrary, it should impel a board to establish adequate policy guidelines for organizational operations and to determine what information it will need in order to monitor implementation of these policies.
The following items refer to nonprofit boards in general. In certain circumstance some of the items may not apply to your board situation (example: if your board is part of YMCA or park district program it probably does not have the authority to hire/evaluate the head coach)
10 Basic Responsibilities of Boards
Responsibilities of Nonprofit Boards
What are the Strengths of Your Board?
Individual Board Member Responsibilities
Many people have a hard time understanding that the responsibilities of the board and the individual responsibilities of its members are not synonymous. This section focuses on the singular, individual responsibilities of board members, rather than the shared responsibilities of the collective board.
Think of the board as a team; decisions and actions need to be made together and for the benefit of the club. As individuals, board members have authority only when they are in the boardroom, when a task has been specifically assigned by the board, or when they are implementing board decisions (e.g., fundraising). Board members are responsible for effectively participating in the board's discharge of its responsibilities, but as individuals they cannot fulfill any of the board's collective responsibilities.
It is important for each board to develop a job description for its members so that everyone is clear on what is expected. A board must hold its members accountable for their performance. This is impossible unless their responsibilities are clearly stated.
Individual Board Member Responsibilities
Taken from the “Club Leadership Development Notebook” a publication from BoardSourcecreated specifically for USA Swimming. For more information about BoardSourcewrite to 1828 L Street NW, Suite 900, Washington, DC 20036-5114. Telephone 202.452.6262. Fax: 202.452.6299, email: firstname.lastname@example.org, website: http://www.boardsource.org/. Copyright 2000. Used with permission.