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Introduction and Basic Overview

What is a Board of Directors? What Does a Board
Look Like?
A corporation, whether for-profit or nonprofit, is required to have a governing Board of
Directors. To explain, a corporation can operate as a separate legal entity, much like a
person in that it can own bank accounts, enter into contracts, etc. However, the laws
governing corporations require that a corporation ultimately is accountable to its owners
(stockholders in the case of for-profits and the public with nonprofits). That
accountability is accomplished by requiring that each corporation has a Board of
Directors that represents the stockholders or the public.

Members of a governing Board have certain legally required (fiduciary) duties, including
duties of care, loyalty and obedience (some states and countries use different terms -- for
example, in Canada, the duties of care and loyalty are often stressed). For-profit Boards
often are referred to as "corporate" Boards, which really is a misnomer because both
nonprofit and for-profit corporations are required to have Boards -- not just for-profit
corporations.

The phrase "Board operations" often refers to the activities conducted between Board
members and can include development and enactment of Board bylaws and other Board
policies, recruitment of Board members, training and orientation of Board members,
organizing Board committees, conducting Board meetings, conducting Board
evaluations, etc. The phrase "governance" often refers to the Board's activities to oversee
the purpose, plans and policies of the overall organization, such as establishing those
overall plans and policies, supervision of the CEO, ensuring sufficient resources for the
organization, ensuring compliance to rules and regulations, representing the organization
to external stakeholders, etc. The nature of Board operations and governance depends on
a variety of factors, including explicit or implicit use of any particular Board model, the
desired degree of formality among Board members and the life-stage of the Board and
organization.

Governing Boards can have a variety of models (configurations and ways of working),
for example, "working Boards" (hands-on, or administrative, where Board members
might be fixing the fax one day and strategic planning the next), "collective" (where
Board members and others in the organization usually do the same types of work -- it's
often difficult to discern who the Board members actually are), "policy" (where Board
members attend mostly to top-level policies), "Policy Governance" (trademark of Carver
Governance Design, where there are very clear lines and areas of focus between Board
and the CEO), etc. All of these models are types of governing Boards.

Boards can have a broad range of "personalities." For example, Boards of large for-profit
and nonprofit corporations might be very formal in nature with strong attention to
Parliamentary procedures, highly proceduralized Board operations, etc. In contrast,
Boards of small nonprofit or for-profit corporations might be very informal in nature.

Major Responsibilities of Board of Directors 1. including executive relations with the board.to provide for fiscal accountability. 2) evolve to "policy" Boards where members focus mostly on strategic matters. Provide continuity for the organization by setting up a corporation or legal existence. approve the budget. innovative.to accept responsibility for all conditions and policies attached to new. Acquire sufficient resources for the organization's operations and to finance the products and services adequately 5. Select and appoint a chief executive to whom responsibility for the administration of the organization is delegated. and 3) eventually become large. Select the Executive . institutionalized Boards that often have small executive committees and maybe many members some of which are "big names" to gain credibility with funders or investors. and formulate policies related to contracts from public or private resources . Govern the organization by broad policies and objectives. in program planning and implementation. and to represent the organization's point of view through interpretation of its products and services. or experimental programs.to review and evaluate his/her performance regularly on the basis of a specific job description. leadership in the organization. Account to the public for the products and services of the organization and expenditures of its funds. formulated and agreed upon by the chief executive and employees. including that they 1) start out as "working" Boards where members focus on day-to-day matters in addition to strategic matters. including: . Determine the Organization's Mission and Purpose 2.Some people believe in life stages of Boards. and advocacy for them 2. Major Duties of Board of Directors 1. and in management of the organization and its personnel . including to assign priorities and ensure the organization's capacity to carry out programs by continually reviewing its work 4.to offer administrative guidance and determine whether to retain or dismiss the executive 3. including: .

Ensure Effective Organizational Planning 5. 9. Provides leadership to the Board of Directors. 5. Determine and Monitor the Organization's Programs and Services 8. Serves as the Chief Volunteer of the organization (nonprofit only) 3. Enhance the Organization's Public Image 9. Ensure Adequate Resources 6. Support the Executive and Review His or Her Performance 4. who sets policy and to whom the Chief Executive is accountable. Manage Resources Effectively 7. Appoints the chairpersons of committees. Monitors financial planning and financial reports. 11. Serves ex officio as a member of committees and attends their meetings when invited. 12. 13. Encourages Board's role in strategic planning 7. in consultation with other Board members. Is a member of the Board 2. Chairs meetings of the Board after developing the agenda with the Chief Executive. Plays a leading role in fundraising activities (nonprofit only) . 10. Is a partner with the Chief Executive in achieving the organization's mission 4. Discusses issues confronting the organization with the Chief Executive. 6.3. 8. Assess Its Own Performance Board Chair Job Description 1. Reviews with the Chief Executive any issues of concern to the Board. Serve as a Court of Appeal 10. Helps guide and mediate Board actions with respect to organizational priorities and governance concerns.

7. Note that materials apply to both for-profit and nonprofit unless otherwise noted. Works closely with the Chair and other staff 5. Performs other responsibilities as assigned by the Board. Oversees the logistics of committee's operations. Performs other responsibilities assigned by the Board. Is a member of the Board 2. 5. Reports to the full Board on committee's decisions/recommendations. Committee Chair Job Description 1.14. In addition to the responsibilities outlined in the Committee Member job description. Sets tone for the committee work. Is a member of the Board 2. Reports to the Board's Chair 4. 6. 16. 3. 6. 15. Reports to the Board's Chair. Works closely with the Chief Executive and other staff as agreed to by the Chief . This position in typically successor to the Chair position. Performs Chair responsibilities when the Chair cannot be available (see Chair Job Description) 3. Evaluates annually the performance of the organization in achieving its mission. this position: 1. 4. Ensures that members have the information needed to do their jobs. Vice Chair Job Description The following description was adapted from materials from BoardSource. Participates closely with the Chair to develop and implement officer transition plans. Formally evaluates the performance of the Chief Executive and informally evaluates the effectiveness of the Board members.

8. Maintains records of the board and ensures effective management of organization's records 3. Regularly attends board meetings and important related meetings.Executive. and reviews and comments on minutes and reports. Board Secretary Job Description 1. 2. 3. Is an active participant in the committee's annual evaluation and planning efforts. 5. Manages minutes of board meetings 4. 6. Participates in fund raising for the organization (nonprofit only). Gets to know other committee members and builds a collegial working relationship that contributes to consensus.) to note applicability during meetings Board Treasurer Job Description . by-laws. 4. etc. Board Member Job Description 1. Is a member of the Board 2. prepares themselves well for meetings. Makes serious commitment to participate actively in committee work. 7. Volunteers for and willingly accepts assignments and completes them thoroughly and on time. Stays informed about committee matters. 9.Is sufficiently familiar with legal documents (articles. Initiates and leads the committee's annual evaluation. Assigns work to the committee members. sets the agenda and runs the meetings. and ensures distribution of meeting minutes. Ensures minutes are distributed to members shortly after each meeting 5. IRS letters.

young organizations often have working Boards that are involved in day-to-day activities. Ultimately. Is a member of the Board 2.1. while older organizations have Boards that attend exclusively to top-level policies and plans. Administrates fiscal matters of the organization 4. services and programs Board . the responsibility for the various activities depends very much on the life-cycle of the organization -. This document should be reviewed by board members to finalize who they would like to do what among board and staff members. Respon- Activity sibility PLANNING: Direct the process of planning Board Provide input to long range goals Joint Approve long range goals Board Formulate annual objectives Staff Approve annual objectives Board Prepare performance reports on achievement of goals and Staff objectives Monitor achievement of goals and objectives Joint PROGRAMMING: Assess stakeholder (customers. Provides annual budget to the board for members' approval 5. Ensures development and board review of financial policies and procedures Board and Staff(Executive Management) Responsibilities To help convey who does what regarding board and staff. community) needs Staff Train volunteer leaders (nonprofits only) Staff Oversee evaluation of products. staff or jointly. the following activities are suggested to be done by board. Manages finances of the organization 3.

prepare program reports Staff Prepare preliminary budget Staff Finalize and approve budget Board See that expenditures are within budget during the year Staff Solicit contributions in fundraising campaigns Board (nonprofits) Organize fundraising campaigns (nonprofits) Staff Approve expenditures outside authorized budget Board Insure annual audit of organization accounts Board PERSONNEL: Employ Chief Executive Board Direct work of the staff Staff Hire and discharge staff member Staff Decision to add staff (nonprofit) Board Settle discord among staff Staff COMMUNITY RELATIONS: Interpret organization to community Board Write news stories Staff Provide organization linkage with other organizations Joint BOARD COMMITTEES: Appoint committee members Board Call Committee Chair to urge him/her into action Board Promote attendance at Board/Committee meetings Joint Recruit new Board members Board Plan agenda for Board meetings Joint Take minutes at Board meetings Joint Plan and propose committee organization Joint Prepare exhibits.Maintain program records. material and proposals for Board and Staff Committees .

Board members and leaders in those organizations must act as if they deserve a very dedicated and participative Board -. members are also sought who have strong passion for the mission (passion-driven staffing). Removing) One of the most important aspects of Board operations is Board staffing. In for-profits.Sign legal documents Board Follow-up to insure implementation of Board and Staff Committee decisions Settle clash between Committees Board Board Policies (Board's guidelines for how members will work together) Board policies are guidelines for how the Board members can best work together. Yet nonprofit Boards very often have highly involved members who take a very strong role in establishing strategic plans and in ensuring that those plans are . that passion alone is not enough -- Board members also must have the time and energy to actively participate in the Board. A Sample Board Manual attached. how they will avoid conflict-of-interest. Joining. etc. In nonprofits. many people perceive for-profit Boards as being more established and effective.that attitude alone can make a huge difference in achieving highly effective Boards. though. how the Board will work with the chief executive officer. when they want to meet. how they recruit and orient new members. trained and evaluated. Yet another pespective is to get members who represent the major constituents of the organization (representative staffing). In nonprofits. e. how members should be on Committees. Informing. Rewarding. rather than tolerating Boards as if they are some necessary evil to be avoided at all costs. There are different perspectives on staffing. Board members and leaders should not approach recruitment and selection as if they are somehow lucky just to get Board members who will show up at Board meetings. Communicating. Some people believe that Boards should be staffed primarily with the expertise needed to establish and achieve current strategic goals (this is functional staffing).(pdf file) Staffing (Size. Just like the careful staffing that is usually done with employees..g. Board members and leaders must appreciate the strong value that Boards can bring. Board members should be carefully selected. Others believe that staffing should also achieve a wide diversity of values and perspectives among members on the Board (diversification staffing). as well. We're learning. how they manage for consistent meeting attendance. Recruiting. Ironically.

objectives and deadlines for achievement. A work plan usually includes specific goals. In Board meetings. Board members of for-profit and nonprofit organizations have much to learn from each other.and for the members of the group to get the most satisfaction -. For ongoing. establish ad hoc committees that cease when the activities are completed. including the Audit Committee and Compensation Committee in for-profits and the Board Development (or Board Governance) Committee in nonprofits. for short-term activities. They can be used as formalized means to get highly focused advice and recommendations about certain topics or even to attend to specific activities. each Committee reports status on implementing its work plan. Frequently. Establish committees when it's apparent that issues are too complex and/or numerous to be handled by the entire board. including the Policy Governance Model (a registered trademark of John Carver). Typical Types of Board Committees About Committees 1. One way to organize.and the best way to get rid of bad Board members is to make sure they have something to do. Advisory Groups and Work Plans It's common for Board members to be organized into Committees.the advisory group should be almost as carefully planned. Often those goals are aligned with goals in an overall strategic plan. minimize or avoid committees altogether. organized and monitored as the governing Board itself. Board Committees. .achieved. 3. Some Committees are increasingly popular. focus and activate Committees is by associating a work plan with each. these types of unfocused groups result in confusion and frustration for its members. Standing committees should be included in the by-laws. Advisory Boards (or Advisory Committees or Advisory Groups) are increasingly common. Some Board models. 2. For the organization to get the most value -. Sometimes these groups are formed merely to "park" people who have served admirably on the governing Board or to associate "big names" with the organization. such as researching an issue or overseeing the construction of a facility. This author realized years ago that the best way to keep good Board members is to make sure they have something to do -. Implementation of work plans gives Board members something to do. Task Forces. Committees recommend policy for approval by the entire board. major activities establish standing committees.

Have at least two board members on each committee.g. Consider having a relevant staff member as a member of the committee as well 7. and ensure board members understand the committee's charge 2. if meetings are not held monthly. such as keeping list of potential board members.. Committees make full use of board members' expertise. outcomes. Note that the following list is not intended to suggest that all of these committees should exist. or every three months. they operate at the board level and not the staff level. In each board meeting. it's ultimately up to the organization to determine which committees should exist and what they should do. orientation and training Ensures sound evaluation of products/services/programs. 7. sometimes Board Development includes role of nominating committee.4. analysis and resulting adjustments . i.e. goals. Evaluation e. committees that exist year round. preferably three 3. consider asking committees members for a volunteer for committee chair 8. time and commitment. Committee chairs are often appointed by the board chair. committee development. data. including. Don't have a member on more than two committees 4. They do not supplant responsibility of each board member. consider having board meetings every other month and committee meetings between the board meeting 9. including retreat planning. and ensure diversity of opinions on the board. Consider having non-board volunteers as members of the committee (mostly common to nonprofits) 6. The chief executive should service ex officio to the board and any relevant committees (some organizations might consider placing the chief executive as a member of the board -. Committees may meet monthly (this is typical to new organizations. Minutes should be recorded for all board meetings and for Executive Committee meetings if the ByLaws indicate the Executive Committee can make decisions in place of the board when needed. structures and roles. 5.this decision should be made very carefully) Potential Standing Committees The following descriptions are intended to portray various functions often conducted by standing board committees. Developing Committees 1. with working boards). Ensure the committee has a specific charge or set of tasks to address. Potential Standing Committees Their Typical Roles Ensure effective board processes.. and board evaluation. 6. have each committee chair report the committee's work since the past board meeting 5. every two months. If committee work is regularly effective and the executive committee has a strong relationship with the chief executive. attempt to have committees meet during the months between full board meetings.

Oversee operations of the board. strategic decisions -. Members of the Board do their work. although this might be too small). link between the board and the staff on program's activities Promotes organization's services to the community. how to meet those Marketing needs with products/services/programs. Executive other officers and/or committee chairs (or sometimes just the officers. Thus. facilitated and documented. meetings can drag on with only some members participating -- participating in spotted discussions about whatever topic was first brought up in the meeting. etc. often performs evaluation of chief executive Oversees development of the budget. leaving the rest of the members to continue this ineffective approach to Board governance. Meetings can be highly participative with very focused deliberations that result in strong. including communications with the press Board Meetings. identifies and solicits funds from external sources of support. ensures accurate tracking/monitoring/accountability for funds. comprised of board chair. It's often the most dedicated Board members who become frustrated with these unproductive Board meetings and soon leave the organization. often acts on behalf of the board during on-demand activities that occur between meetings. including identifying potential markets. Personnel sometimes assists chief executive with leadership and management matters Guides development of service delivery mechanisms. these meetings should be carefully planned. including Promotions and Sales generating fees for those services Represents the organization to the community. their needs. Or. sometimes leads evaluation of the chief Executive. Meeting Process. enhances the Public Relations organization's image. and these acts are later presented for full board review. working Fundraising with the Development Officer if available. . ensures adequate Finance financial controls. and how to promote/sell the programs Guides development. review and authorization of personnel policies and procedures.decisions that are captured in meeting minutes and then closely monitored for implementation. often led by the board treasurer. primarily in their Board meetings. sometimes called Development Committee Oversees development and implementation of the Marketing Plan. reviews major grants and associated terms Oversees development and implementation of the Fundraising Plan. may include Product / Program Development evaluation of the services. Retreats.

Year) (Location) (Planned Starting Time to Ending Time) Activity Action Minutes from previous meeting Approval Chief Executive's Report Discussion Finance Committee's Report Approve Budget Changes Development Committee's Report (nonprofit) Approve Fundraising Plan Approve Plans for Retreat Board Development Committee Adopt Resolution to Change ByLaws Other Business .Announcements Roundtable Evaluation of Meeting Review of Actions from Meeting Adjourn .).New . an agenda also includes suggested times in which to address each topic. etc. Without that careful design and facilitation of the agenda.and overall ineffective governance of the organization.Old .and strong governance -. Board Meeting Agenda and Minutes (and Decisions During Meetings) Sample Board of Directors Meeting Agenda Ideally. to make a decision. and 3) specific times to address each topic. assign further research.is to carefully design an agenda and then closely facilitate to that agenda. Agendas should include 1) strategic topics to address in that meeting. 2) specification of how each topic is to be addressed in that meeting (for example. Board meetings too often result in prolonged confusion and frustration of members -.One of the most effective ways to accomplish productive meetings -. (Name of Agency) Board Meeting Agenda (Month Day.