There are fiduciary responsibilities and liabilities involved with being a board member.
It is essential to know and understand them and the directors and officers (D&O) liability insurance coverage.
In the State of Washington, RCW 24.03.127 defines the Duties of a Director for a non-profit corporation. It requires directors to act ”in good faith, in a manner such director believes to be in the best interests of the corporation, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.”
Jacobson Jarvis and Company offers an excellent resource for new and existing board members. What Board Members Need to Know About Not-for-Profit Finance and Accounting.
Understand the skills you bring to the organization. Find the best ways the organization can leverage your skills to make the most significant impact on and for the organization.
The board, of which you are a part, is responsible for the governance of the organization. Become familiar with these responsibilities, so you can actively participate in the board and contribute to the well-being of the organization.
Board member responsibilities can include:
1) Determine the Mission and Purpose of the organization
- Create the organization’s Mission and Purpose
- Review the mission purpose annually and update every 2-3 years
2) Select and evaluate the CEO or Executive Director
- Ensure they have the internal support needed from both the staff and the board
- Ensure the CEO skills continue to meet the organization’s needs as it changes/grows. Organizations often require different skills at different organizational cycles.
3) Ensure effective planning; actively participate and assist in the implementation
- Creation & implementation of a strategic plan
- Note – a strategic plan has a lifespan of 3-5 years
- The strategic plan should be reviewed and updated annually
4) Monitoring and strengthening programs and services
- Ensure programs and services are consistent with the organization’s mission
- Monitor the effectiveness of programs and services by quantifying focusing on results
- Note – this is not the same as creation or management of programs. Those functions are the responsibility of the executive director.
- Note – this is not the same as creation or management of programs. Those functions are the responsibility of the executive director.
- Coordinate efforts with the executive director, finance and development directors
5) Ensure adequate financial resources to fulfill the organization’s mission 6) Protect assets and provide proper financial oversight
- Assist in the development of the annual budget
- Monitor and review financial statements, reserve account(s), and endowment(s)
- Ensure completion of annual audit (full or reviews)
- Address any issues found promptly and annually
- Review submission of IRS Form 990 (Return of Organization Exempt from Income Tax)
- Ensure adequate financial controls are in place
7) Building a competent Board
- Articulate prerequisites for board member candidates (job description, board packet, a defined process for approval)
- Encourage board and staff to refer potential candidates
- Orient new board members with a thorough onboarding process
- Periodically and comprehensively evaluate your own performance
8) Adhere to legal standards and ethical norms
9) Enhance the organization’s public standing
- Have the ability to clearly articulate the organization’s Mission, Vision, Goals, and accomplishments to the public
- Be open to attending meetings (i.e. city, council, state government, and networking)
10) Responsible for fundraising
- By contributing your time, talent, or treasure
- Be open to attending special events and responding positively to asks
11) Policies – understand them, ensure they exist and are in the Board Manual. Including:
- Conflict of Interest, for the board and the staff
- Whistle Blower Policy
- Investment policy, including asset allocation and restrictions
- Gift Acceptance for the Board, Staff, and organization (what donations will not be accepted, e.g., art jewelry?)
- Including: what and how much gifts are allowed
- Diversity policy
Board membership provides excellent networking opportunities. Spend time getting to know fellow board members and learning the ins and outs of the board, the committees, and the organization. You will have the opportunity to see the skill sets of other board members, which may result in referrals and direct business to you. It is a fact that people do business with those they like and trust. Who better than a fellow board member?
Being a good board member not only positively contributes to the organization’s clients and staff but to the overall community, you ultimately serve, making your city, state, county, etc. better.
