Whether you are starting a nonprofit or growing an existing non-profit, you will need committed, passionate, and highly skilled members to be a part of the decision-making team. These core decision-makers will constitute your board members or the leaders of your organization.
Yet, when you want to take the work of your organization forward and scale your social impact, the following questions arise: What kind of people would be right for your board and where do you find said, people?
Starting and running a non-profit organization successfully would entail assembling a level-headed board of directors. In this blog, we will discuss what a non-profit's board is. Why do nonprofits need a board of directors? benefits of having a board of directors and their roles and responsibilities. We hope that by the end of this article, you will have a better understanding of the significance of a board of directors.
What is a board of directors for a Nonprofit?
No matter the mission or level of a nonprofit's status, all organizations need clear leadership and management. The board of directors will be the body in charge of the organization and is made up of people with diverse abilities and a passion to see the organization flourish, and often functions with this oversight.
The governing body of a nonprofit is its board of directors, commonly referred to as its nonprofit board. A nonprofit board's members concentrate on the organization's high-level strategy, supervision, and responsibility. In contrast to those who handle the nonprofit's daily activities such as staff or managers.
Why having a board of directors is essential?
The board's main responsibility is to supervise the nonprofit's operations. They accomplish this by gathering frequently to deliberate and decide on the affairs of the organization.
There are various reasons why nonprofits require a board of directors - The abundance of information and expertise the members possess is critical to the organization, and they are also required for important duties like opening bank accounts, submitting yearly reports, and making significant purchases. Additionally, they serve as the deciding factor in important choices like passing annual budgets, taking out loans, and formulating strategies for significant expansion or restructuring.
What are the benefits of a board of directors?
A nonprofit's board of directors comprises individuals appointed to act as their representatives and make decisions on the organization's behalf. The board of directors is responsible for establishing and implementing company rules, as well as for solving important company issues. Here are some of the benefits of having a board of directors:
- Skills and Expertise:
In our ever-changing environment, a few important characteristics to have is the ability to be dynamic and agile. The expertise and knowledge of a versatile board of directors is a real boon to any organization looking to set foot in the right direction. These members can also provide your nonprofit with valuable and much-needed contacts.
- Organizational Authority
Governance, a set of guidelines, policies, and practices that give companies direction and control over how to run efficiently and add value, supports organizational authority. It serves as a strategy for balancing the hopes and apprehensions of those who are involved in the nonprofit such as - donors, all levels of management, employees, beneficiaries, and the community at large.
- Responsibility and Independence
The board of directors should ideally be impartial and independent so that they may make decisions that are in the company's best interests without being influenced by competing interests. The advisory and supervision duties of the board of directors are impacted by their statutory duties.
- Credibility and Integrity
A good board of directors provides trustworthy and moral decision-making in order to provide unbiased counsel that lowers the likelihood of danger. Investors and financial institutions view that as a benefit that will help cut a company's capital cost financing. Customers, suppliers/vendors, and employees all see it as a protection of their interests.
Whom should I have as part of the board?
There are no laws that specify who may serve on a nonprofit's board of directors. This implies that it is totally up to your nonprofit to choose the ideal candidate for the job. Having said that, there are a few factors that businesses should take into account when hiring board members.
It will be in your organization's best interest to pick visionaries—individuals with broad perspectives on your organization and the ability to discern the optimal course of action. A passion for and dedication to your cause is another key attribute to look for in a board member. Your board members will be more inclined to make choices and be motivated to keep working toward your mission if they are inspired by it.
It is also advised to have a skilled, unpaid volunteer on your board. While paid employees may check most of the above-mentioned criteria, they may find a conflict of interest while serving as a board member and receiving a monetary remuneration for it. This can at times lead to overworking and stress for these individuals. If you're not sure who to pick, try to find someone who has experience in business matters.
You can start your search for possible board members by using platforms like Board Member Connect on LinkedIn. LinkedIn makes it simple for nonprofits to identify people who meet their requirements because it allows users to declare whether they are willing to serve on a nonprofit board. To determine who will be the best fit, you can then perform additional research, analytics, and interviews.
What structure do nonprofit boards have?
Nonprofits can have a board ranging from three to thirty or even fifty members in some instances but there are a few roles and positions that always need to be filled. The three most important positions on the board are:
- The President: Your nonprofit board is led by the president of your board of directors. They set the agendas for board meetings and serve as the chair. In addition, this person serves as the board's main point of contact and oversees all business matters. Although this person may hold the company's executive director position, their function is substantially different. Your board president is in charge of governance, while your executive director oversees day-to-day operations.
- Secretary: Your board of directors' secretary is in charge of distributing the agenda for meetings and keeping the minutes of those meetings. Additionally, they'll guarantee that all paperwork is properly kept and organized for subsequent access and that all acts comply with the organization's bylaws.
- Treasurer: By keeping account of receipts and payments, the treasurer on your board of directors is in charge of monitoring the financial health of your company. This person may be a member of your financial team or at the very least regularly communicate with them. Your treasurer will deliver the results of any financial audits you are obligated to perform.
These members of your board of directors often get together a few times a year to make decisions and make sure the company is moving in the right direction. While existing nonprofits may need to rearrange their boards as they expand and add to their staff, new nonprofits are left to build their boards from the ground up.
Roles and responsibilities of the board of directors:
In general, those who join nonprofit boards are anticipated to assume a variety of duties for the business. Every nonprofit is going to be a little bit different in how its board of directors operates and works. In essence, nonprofit boards of directors are responsible for four primary tasks: making choices about CEO compensation, attending board meetings, handling legal and fiduciary matters, and serving on committees.
- Setting the nonprofit's goals and mission
A nonprofit’s board of directors is responsible for the setting of the nonprofit’s vision, mission and it’s action plan. To build the community’s faith in the nonprofit, they will need to have a clear vision and understanding of what they would like to achieve, the time frame they would like to achieve their goals, and who their beneficiaries will be. This way they will be able to reach out to the right target audience for funding and other financial and operational needs.
- Picking the face of the organization
The organization's public face will be represented by this individual, who would also be the CEO/managing director of the nonprofit. They will choose the actions to be performed to guide the nonprofit in sustaining its solvency and reputation. Although this is a senior position that is crucial to the organization, none of the board members are exempt from their duties. More than ever, the board needs to be in touch with the company to routinely evaluate the executive's performance, which is still a board responsibility.
- Ethical and legal obligations
Your board must be informed of all the legal standards that are relevant to the organization and ensure that they are followed. Your board of directors, for instance, ought to be aware of the consequences of, say, overpaying employees or engaging in political lobbying. Board members are responsible for making sure that tax forms are completed annually, even though they won't likely be the ones to actually submit your tax returns.
- Determining the lifecycles of programs
Examining whether planned and present programs are consistent with the organization's mission, purpose, and vision is one of the board's core responsibilities. Although it is common for there to be competing priorities, the board will ultimately decide how a given program will proceed. At the time of review, it may be delayed, scaled up or down, revoked, or simply denied.
- Capable of introspection and evaluation.
For the board to self-regulate, it must function as its court of appeals. The board will be responsible for directing the development of standards of practice or procedure for managing the grievance and governance processes, as well as any challenges to current procedures or practices. This is done to make sure everyone associated with the organization abides by the rules outlined in the documents.
In short, the board must supervise all documentation pertaining to agendas and meeting minutes, while the secretary is in charge of legally recording your sessions. The board is in charge of keeping all meeting records up to date and accurate.
Your nonprofit organization’s board of directors can be your most important and valuable asset when it comes to the smooth running of your organization. They can lead your organization through tough times and decisions with ease. So, as a nonprofit professional, you must comprehend the goals of your nonprofit board, select the ideal board members, and work to ensure that everyone values the objective and vision of the mission.
We at Chezuba also understand your desire to run your nonprofit optimally. This is why we have built a platform where you can find the right volunteer to onboard so that you can focus on what matters most to your organization, your beneficiaries. We have volunteers from across the world who would be happy to assist your nonprofit. Post a project with us at - Chezuba for nonprofits.