A board of directors must ensure that a nonprofit fulfills its obligations to:
- The Law
- The Public
Charitable Allies can make sure board policies delineate responsibilities, help board members be appropriately informed about the inner workings of their nonprofit, and protect board members from unnecessary exposure.
We will help your charity implement best practices, such as those recommended by BoardSource, the only national organization focused exclusively on nonprofit board governance.
- Conducting a board self-assessment leads to a better shared understanding of the board’s responsibilities related to compliance, accountability, financial oversight and the organization’s ultimate direction.
- Knowing how to evaluate your organization’s chief executive is a crucial board duty.
Most states have codified nonprofit board responsibilities under three main duties: care, loyalty and obedience.
Duty of care requires a board member to exercise the same care that an ordinary, prudent person would under similar circumstances. State laws differ on the degree of care required.
Duty of loyalty requires a board member to act in good faith and pursue the organization’s best interests. This includes full disclosure of any issues that could cause (or be perceived to cause) a conflict of interest, and recusing oneself from all discussions
formal and informal) related to it.
Duty of obedience forbids acts outside the scope of the organization’s rules, policies, mission statement, articles of incorporation and bylaws. In addition, the board must comply with state and federal laws.