Nonprofit Board Member Duties and Responsibilities Form the Lay of the Land

Have you ever looked out of an airplane window and marveled at how differently everything looks from an aerial view? You noticed which highways were jammed with traffic and which roads were barren. Maybe you detected a few important landmarks. As a member of a board of directors for a nonprofit organization, you have a duty and a responsibility to examine your organization’s landscape to ensure that the current (and future) landscape is healthy and productive.

The greatest quality of a nonprofit board member is having the ability to view the activities of the organization from a broad perspective.

Duties of a Nonprofit Board Member

The duties of every nonprofit board member fall into three categories — duty of care, duty of loyalty and duty of obedience. Let’s take a look at how each of a nonprofit board member’s obligations falls into each classification.

1. Legal Duties

The board of directors for a nonprofit organization has a legal duty to establish an information and reporting system to flag board members when any potential legal concerns are looming. The reporting system needs to be devised so that it alerts board members with sufficient time to take action if it’s needed. Legal duties fall under the duty of care.

Being a director of a nonprofit board is an active role, where individual directors should be vetting all issues and concerns by asking questions to get clarification and secure the facts. Once issues are out on the table, each member has a duty to participate in discussion about how to avoid or mitigate any legal matters or potential legal matters to protect the organization.

When nonprofit board members lack the legal expertise to make competent decisions, they should seek out independent professional advice, especially regarding contractual issues.

Nonprofit directors that hold strong commitments to matters of compliance, transparency and accountability have a better chance of safely navigating away from any legal trouble.

2. Hiring the Executive Director or CEO

One of the first and most important duties of the nonprofit board of directors is to make sure that the organization has a strong and competent leader.

The board should form a process for recruiting and vetting candidates that includes a thorough interview process. As part of their process of designating leadership, nonprofit boards need to establish a format for setting the executive director’s or CEO’s compensation. When developing these processes, it’s important to also set up a plan for the director’s evaluation. The board may opt to delegate these tasks to a committee.   

3. Fundraising

The board of directors has a duty to participate in fundraising, which also falls under duty of care. Having profitable fundraising programs ensures that the nonprofit has the financial resources to fulfill its vision and mission. Most nonprofit organizations require that each board member make a personal annual donation to the organization.

4. Financial Matters

Besides planning and participating in fundraising, nonprofit directors have a duty to oversee all financial matters. Board members have the responsibility for the financial oversight of earnings from product sales; services or events; and donations, grant monies and government support.

Financial oversight also includes making sure that members of the organization use nonfinancial assets prudently and responsibly. Board members need to make sure that facilities are clean and properly maintained, and that directors or members are not wasting materials or other resources. Taking responsibility for asset management includes overseeing employees, such as monitoring hiring and firing, and overseeing salaries or other benefits.

Responsibilities of a Nonprofit Board Member

You’ll find the responsibilities of a nonprofit board member in your organization’s bylaws and in the job description of the officers and board members. Most of the responsibilities of nonprofit directors fall under duty of loyalty and duty of obedience.

Responsibilities That Fall Under Duty of Obedience

The organization’s bylaws guide the nonprofit directors in all areas of ethics and compliance. The directors, individually and collectively, have the responsibility for complying with all federal, state and local regulations.

Ethical integrity is a reflection of the organization’s public and private credibility. Thus, each board member has a responsibility for making decisions and presenting themselves in a virtuous and ethical manner.

A thriving nonprofit organization usually has many programs and services. In keeping with the organization’s vision and mission, board directors should be routinely and actively monitoring and strengthening their offerings to the community.

While serving on a nonprofit board can be fun and rewarding, occasionally, the board must deal with matters that are uncomfortable. They are responsible for avoiding and resolving conflicts, and as necessary, acting as a court of appeals when there are disagreements between board members.

Finally, board members need to monitor their own individual performances and the performance of the full board.

Responsibilities That Fall Under Duty of Loyalty

When setting up a nonprofit entity, the founding board members need to write the vision and mission, which is central to everything else they do. Board members have a responsibility to make sure that every decision they make and every vote they take falls squarely within the vision and mission.

Nonprofit board directors should make every effort to attend all board meetings, in person, whenever possible. Bylaws will often indicate how many board meetings a director can miss before the board takes some action regarding the director’s status, because missing meetings affects voting and decision-making.

Confidentiality is a key responsibility of nonprofit board members. Directors should respect the confidentiality of the organization’s affairs, especially when breaching that confidentiality could interfere with the progress of the organization’s mission.

Board members should make all decisions in the best interests of the organization and avoid personal conflicts of interest. The bylaws should include a specific conflict of interest policy, which should be strictly enforced by all board members.

Since much of the organization’s support and finances comes from the community, board members play a central role in enhancing the reputation of the organization, advocating for its mission and networking with the public. This includes showing the organization in a positive light in the media to promote the organization’s cause.

On a more personal level, board members have a responsibility to maintain good relationships with each other, staff, affiliates and others within their network.

Concluding Thoughts on Nonprofit Board Member Duties and Responsibilities

When individuals in a community come together with a common cause, forming a nonprofit organization offers a platform where like-minded individuals can band together to further the cause. While forming a nonprofit organization is noble on its face, it’s vital that the founding members form it responsibly.

The principles behind duty of care, duty of obedience and duty of loyalty form the best practices that give the organization guidance and ensure that it operates responsibly.

Next time you look out of an airplane window, broaden your perspective. Notice that the landscape below you forms a patchwork of individuals, profit and nonprofit groups, and communities that all work together for the betterment of everyone.