LUTZ BUSINESS INSIGHTS
Assigning responsibilities to your nonprofit’s board of directors
katie byrd, audit director
The Board of Directors plays a critical role in the stewardship of nonprofit organizations. Although levels of involvement and exact duties may change depending on the organization, many basic tasks and positions are consistent. This blog covers the roles and responsibilities a Board of Directors should encompass.
Board Member Responsibilities
1. Define the organization’s mission and objectives
An organization’s mission should be clearly stated, and each board member should understand and be able to describe this mission easily. The board should set appropriate expectations with management to lay the groundwork for carrying out the organization’s mission.
2. Oversee and support the Executive Director/CEO
Selecting a competent Executive Director/CEO is vital to the success of an organization. The board is responsible for evaluating the performance of the Executive Director/CEO in relation to the organization’s mission. At the same time, the board should guarantee that the Executive Director/CEO is receiving the personal and legal support needed to achieve the organization’s objectives.
3. Develop the organization’s strategy
The board must be involved in the planning stage of the organization and aid in executing the plan’s objectives. The executive board should assist management in developing corporate strategies, policy agendas, marketing practices, and other initiatives.
4. Evaluate the organization’s services and programs
The board should continuously evaluate the organization’s programs to ensure they align with its mission. Unprofitable programs should be scrutinized to determine their importance to the overall mission. It is also crucial for the board to assess whether moral and legal guidelines are being followed through the actions of management.
5. Ensure financial accountability and sustainability
To maintain the organization’s tax-exempt designation and to stay responsible to donors and the community, the board should assist in developing a financial plan. The board should approve an annual budget and regularly evaluate it to actual results. Board members should be in tune with the financial stability of the organization and collaborate with fundraising personnel to ensure the organization can continue to grow.
6. Advocate for the organization
The board’s actions should serve in the best interest of the organization, which occasionally requires board members to set aside personal and professional interests. Board members should also serve as ambassadors for the organization in the community. A dedicated board should be active in the mission of the organization.
7. Establish committees
An effective board establishes committees that provide more detailed oversight of certain areas of the organization (such as fundraising, finance, governance, etc.). Each board member brings a unique set of skills that can be utilized to strengthen the effectiveness of the board’s oversight. Committees allow board members to take on a more active and focused role in the organization.
8. Attract and educate new trustees
The board must appoint suitable candidates and familiarize them with their duties and the organization’s background, interests, and difficulties. The board may acknowledge its accomplishments and decide what aspects should be modified by reviewing its progress. The governing board should be flexible to maintain appropriate governance of a growing and changing organization.
Choosing Board Members
Since the Board of Directors is an essential part of any nonprofit, it is important to employ strict criteria when recruiting new members. When evaluating a prospective new member, the following traits should be considered:
- Provides a wide range of talents, knowledge, and originality for the board.
- Possesses different histories that complement those of existing members. A “balanced” panel of thinkers requires a variety of backgrounds and skillsets.
- Has an interest in the wellbeing and growth of the organization and is committed to being an engaged member of the board
Board Member Descriptions
Several board members will take on additional responsibilities as appointees and/or representatives. The following briefly describe certain leadership positions that are common in a board of directors:
- Presides over all board meetings.
- Collaborates with the Executive Director/CEO in attaining the organization’s goals.
- Appoints committee members and chairs.
- Holds board members accountable for their participation and attendance.
- Analyzes the organization’s efficiency in accomplishing its mission.
- Assesses the performance of the board and the Executive Director/CEO.
- Leads the strategic planning of the organization and encourages continuous growth.
- Sets attainable goals for the board and the organization.
- Coordinates and spearheads any significant fundraising campaigns.
- Prepares to eventually assume the responsibility of the Chair.
- Assumes the duty of the Chair upon his or her absence or departure.
- Reports directly to the Chair and assists in the execution of his or her responsibilities.
- Develops and implements executive succession strategies in collaboration with chair members.
- Maintains the board’s archives and guarantees that the organization’s data is properly handled and is easily accessible.
- Prepares and organizes official board minutes, including recording any actionable items from the meeting.
- Provides meeting agendas and written board minutes to all board members.
- Is knowledgeable enough with affidavits (e.g., statutes, policies, IRS notices) to recognize their relevance throughout discussions.
- Assists in the preparation and ongoing evaluation of the annual budget
- Manages the organization’s financial matters.
- Oversees the annual audit process (if applicable) and ensures the organization remains current on its required annual filings.
- Evaluates financial results and communicates financial information to the board.
The Board of Directors is ultimately responsible for the success or failure of an organization. Therefore, it is critical to develop a diverse team and establish clear expectations for each member. Contact us if you have questions or would like to learn more about our nonprofit accounting services.
ABOUT THE AUTHOR
KATIE BYRD + AUDIT DIRECTOR
Katie Byrd is an Audit Director at Lutz with over eight years of related experience. She provides assurance services to businesses focusing on the retail, service, manufacturing, nonprofit, and franchise industries. In addition, Katie assists with transaction advisory services and employee benefit plans.
AREAS OF FOCUS
- Employee Benefit Plans
- Transaction Advisory Services
- Retail Industry
- Services Industry
- Manufacturing & Distribution Industry
- Nonprofit Industry
- Franchise Industry
AFFILIATIONS AND CREDENTIALS
- American Institute of Certified Public Accountants, Member
- Nebraska Society of Certified Public Accountants, Member
- Certified Public Accountant
- BSBA in Accounting, University of Nebraska, Lincoln, NE
- University of Nebraska-Lincoln School of Accountancy, Junior Advisory Board Member
- Tomorrow's Leaders (Cystic Fibrosis Foundation), Council Member
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