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IN BOARDS …
Nonproﬁt organizations and publicly-owned for-proﬁt corporations have them, but what do they do?
Businesses and organizations need oversight from time to time. That’s where a board comes in. Boards of directors help steer organizations. Here are some speciﬁcs to give you a better idea of what they do to help:1
BOARD OF DIRECTORS
Establish mission and vision
Contribute to organizational planning
Select and support executive leadership
Evaluate executive leadership performance
Ensure and manage resources
Evaluate program and service performance
There are some differences between nonproﬁt and for-proﬁt boards, though. Here are a few:
Purpose FOR-PROFIT Earn revenue for owners (shareholders) NONPROFIT Serve the public Meet the public’s needs Not usually on the board Unlikely Likely Increased proﬁt margins and greater revenue Usually on the board Likely Unlikely Success Role of director Compensation Fundraising responsibilites
1. Chairman of the board2
✓ Develop meeting agenda and preside over meetings ✓ Recruit board members of the community ✓ Contribute to strategy development with the executive team, streamline it, and then supervise its execution by management ✓ Oversee and assess executive performance
✓ Keep meeting notes ✓ Track meeting minutes ✓ Certify formal and/or legal documents
✓ Annual budgets ✓ Audits ✓ Forecasting
Many boards also have committees.
Committees are formed in an effort to help the board with planning and project management. There are committees on things like… Personnel, Marketing, Finance and Program Development. Utilize the skills of your board members within the committees.
Oftentimes, the more established a board is, the more people it has. Many states require just three people to be on a board and in some cases just one. As the organization grows, so does the board.
Median board member count = 5.5
Which is better? A BIG board, or a small board?
✓ Have greater diversity of membership ✓ And a wider range of viewpoints and ideas. ✘ Tend to be more bureaucratic and slower-moving
Bylaws are like the laws of a government or the rules of a game. Bylaws dictate how the board is organized, how it operates, and includes some other rules like:6
Time, location and structure of meetings
If the corporation is a for-proﬁt, bylaws should include the title and rate of pay for ofﬁcer positions
Being part of a board can be a great way to develop leadership experience beyond the ofﬁce. Start looking around your community for a board in need of some up-and-coming-leadership potential like yours to guide them into the future.
Carter. “What Is a Board of Directors? What Does a Board Look Like?” All About Boards of Directors (For-Proﬁt and Nonproﬁt). Authenticity Consulting, LLC., n.d. Web. 23 Oct. 2012. <http://managementhelp.org/boards/index.htm>.
Carlo, Guilherme Dale, Julie Hembrock, and Willi Schoppen. “Five Things Board Directors Should Be Thinking about.” Five Things Board Directors Should Be Thinking About. SpencerStuart, 01 Dec. 2010. Web. 23 Oct. 2012. <http://www.spencerstuart.com/research/articles/1475/>. Kate. “Balancing the Mission Checkbook.” What Makes a Great Board Treasurer? Nonproﬁts Assistance Fund, 28 Sept. 2010. Web. 23 Oct. 2012. Is the Best Size for Your Board?” Council on Foundations, 2010. Web. 23 Oct. 2012. <http://www.cof.org/ﬁles/Documents/Governing_Boards/Board%20Briefs/Boardsize.pdf>. Are Corporate Bylaws and Why Are They Important?” All Business. Dun & Bradstreet, n.d. Web. 23 Oct. 2012. <http://www.allbusiness.com/corporate-governance/corporate-formalities/1389-1.html>.
✓ More ﬂexible when it comes to meetings and agendas ✓ Tend to be tighter knit ✘ Run the risk of narrow-mindedness and stagnation
How many board members are needed
What kinds of qualiﬁcations they should have
Approval of contracts, loans, loans, checks and, if a for-proﬁt, stock certiﬁcates
Process by which a board law, article, charter or constitution may be changed
Infographic created by www.4imprint.com, based on the . Boards: Why do they matter? Blue Paper® Download Blue Paper at: http://info.4imprint.com/bluepapers/boards-why-do-they-matter/
5 Ibid. 6 “What
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