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Sunday, June 26, 2011

The Many Hats of a Board of Directors - Emily

Volunteering time and talent to a board of a nonprofit organization can be rewarding and beneficial to the member as well as the organization. Membership requires not only time and talent, but commitment to fulfilling a set of roles and responsibilities.

The roles of a board, collectively, have one purpose: to advance the mission of the organization (Inglis, Alexander, Weaver, 1999). Members are selected for seats on the board based on ability for fulfilling these roles. The board as, a group of interested people, are to determine mission and purpose, develop strategic plans, support and evaluate the chief executive officer, provide financial management, enlist financial resources, advance the organization’s image, and strengthen its own effectiveness as a board (Inglis, Alexander, Weaver, 1999). In this administrative role, the board and CEO have a principal-agent relationship. This means that the board guides and directs the CEO and other upper management in the operation of the organization. This relationship works well if both parties are open and involved, which is the responsibility of the board chair to manage.

Outside of board agendas and meeting minutes, a board is responsible for stewardship of the organization. This goes beyond budgeting and program planning. Boards of directors are held responsible for revenue collected from donors and grants. Organizations must use the money they receive for the populations they serve. Nonprofits have more pressure than their for profit counterparts to be responsible, respectful, and wise in the use of generous contributions. Additionally, boards are charged with the responsibility of protecting the reputation of the organization. This means acting as representatives of the organization and responding appropriately to negative press, interactions with competing organizations, and the public. This is also a principal-agent relationship whereas the principal is the community (funders, population served, stakeholders) and the agent is the board of directors. Again, this relationship works well with openness, transparency, and involvement.

A method for ensuring proactive board involvement is to measure board productivity on a regular basis. The framework for this measurement should be derived directly from the mission statement and strategies for fulfilling it.

Board roles and responsibilities are vast and ever changing depending on the environment of the organization. Ideally, boards will have a proactive approach to these roles and responsibilities and be a stable go-to for the CEO.

Inglis, S., Alexander, T., & Weaver, L. (1999). Roles and responsibilities of community nonprofit boards. Nonprofit Management & Leadership, 10(2), 153-167.

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