Introduction. A Nonprofit Organization’S Board Of Directors

932 WordsMay 9, 20174 Pages
Introduction A nonprofit organization’s Board of Directors (BOD) serves its legal governing body and as the governing body, the BOD sets standards of conduct and has legal responsibilities. The BOD’s main legal responsibilities are often segregated into 3 principal duties, commonly referred to as the “3-Ds”. The 3 duties attributed to the BOD are expressed as: “1) duty of care; 2) duty of loyalty; and 3) duty of obedience” (Grantspace, n.d.). It is the BOD’s obligation to remain accountable to its constituency and demonstrate transparency in finances and operations. Confusion and tension can arise between the BOD and the ED when roles and responsibilities are vaguely defined. While the BOD may delegate authority to an Executive…show more content…
BOD-ED/CEO Collaboration Boards are not all-seeing or all-knowing. They are comprised of individuals with strengths and weaknesses that must function as a collective whole rather than individuals. Some board members take advantage of their oversight role and try to micromanage the ED/CEO. EDs can retaliate by restricting the flow of information. To avoid conflicts and confusion and help Board members to be effective in their duties, several nonprofit support organizations like Bridgespan and BoardSource offer sample BOD job descriptions. A periodic board self-assessment can help to keep the board members focused on their roles and responsibilities within the organization. Sometimes it’s necessary to engage consultants or outside help to resolve BOD-Staff tensions. To make informed decisions, the BOD must rely upon the organization’s staff and ED to supply their information needs. Many BODs choose to hire an ED/CEO that has strong financial leadership capabilities. By working in partnership, the BOD and ED/CEO can address critical finance issues such as the management of finances and fiduciary oversight, the management of financial risk, financial transparency, and federal/state regulations and oversight. According to the Nonprofits Assistance Fund, one means to insure prudent financial management is for the
Open Document