The board of directors is the organization’s steward and is responsible for developing and maintaining public trust. The board of directors can be effective in fulfilling its goals and expectations only if a clear and common understanding of its role and responsibilities is established and cultivated.
The board of directors is responsible for defining the organization’s mission and for providing overall leadership and strategic direction to the organization. The board actively sets policy and ensures that the organization has adequate resources to carry out its mission. The board provides direct oversight and direction for the chief executive and is responsible for evaluating that person’s performance, as well as approving competitive compensation. The board also has a responsibility to evaluate its own effectiveness as a governing body in upholding the public interest(s) served by the organization.
The Legal Duties of The Boards of Directors
Directors are held to basic legal duties as a matter of state law, common law, and federal law. The core fiduciary duties are the duty of care, duty of loyalty, and duty of obedience to mission.
Duty of Care — A director of a nonprofit organization shall discharge all his/her duties as a director, including those performed as a committee member:
- in good faith;
- with the care that an ordinarily prudent person in a similar position would exercise under similar circumstances; and
- in a manner the director reasonably believes to be in the best interests of the organization.
The duty of care entails a duty of reasonable inquiry. Each director is obligated to ask questions and demand information to allow him/her to have sufficient information and understanding to make decisions he/she reasonably believes are in the nonprofit’s best interests.
Duty of Loyalty — Directors are obligated to exercise an undivided and unselfish loyalty to the organization they serve. Directors must exercise their obligations and powers in the best interests of the organization and its charitable mission, not in their own interests or in the interests of another person or entity (even if charitable in nature).
Duty of Obedience — Directors are obligated to further the mission of the organization they serve, to be faithful to its purposes and goals, and to act in conformity with all laws affecting the organization.
The following positions are available: