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Board Management Training Outline1. Why does the board exist? “The public interest” The State of New York allows a not-for-profit corporation to represent itself as acting in the public interest, to solicit tax-deductible contributions, and to enjoy the same limited liability as a for-profit corporation. In using tax-deductible contributions, it is spending public funds. The State requires that there be a process to assure that these funds are being used for the authorized purposes of the organization. This is the “governance” responsibility of the Board of Directors. * The Duty of Care The board is responsible for assuring that the organization acts in compliance with its mission and by-laws and fulfills its governmental responsibilities. * Duty of Loyalty. As part of this responsibility, Board members also have a fiduciary duty. A board member cannot make financial gain at the expense of the organization. Board members should avoid even the appearance of a conflict of interest. While it is technically legal for a board member to provide gods or services for a fee, such contracts are to be avoided if at all possible. Any contract with a Board member must be carefully scrutinized. Under no circumstances may that Board member vote on or influence the awarding of that contract. 2. How does the board fulfill its “duty of care?” The board fulfills this responsibility by setting and monitoring the standards by which the organization acts and by assuring that the organization has the resources it needs to meet those standards. The implementation of those standards is the responsibility of the Executive Director and the staff. The Governance responsibilities of the board
1. Provide oversight of finance
3. What authority does the board have to enable it to fulfill its duty of care? The Certificate of Incorporation and the Bylaws give the board, acting as a deliberative body, the authority to make the necessary policy and financial decisions. It is important to note however, that just like members of a legislature, board members have no authority as individuals. Discussion * What are the responsibilities of individual board members? 4. What is the division of responsibility between the board and the staff? Working on this balance is the key to having a successful board. Helping the board to stay focused on its responsibilities is a key leadership challenge for the Executive Director and the Board Chair. The more board engages in matters that are the responsibility of the staff, the less resource it has to accomplish the tasks that only the board can do. Is it a matter for the board?
* Does it involve the mission or the strategic plan? 1. Provide oversight of finance The budget Governance responsibility
* Create the annual financial plan Management responsibility
* Provide cost and expense data for all programs Financial administration Governance responsibility
* Establish financial control policies Management responsibility
* Financial operations (payroll, purchasing, banking, etc.) Whose responsibility?
* Selecting a new telephone system 2. Insure that programs are effectively directed at achieving the mission of the organization Governance responsibility
* Establish program goals to achieve the organization’s mission Management responsibility
* Program operations Whose responsibility?
* Interviewing clients to ascertain program effectiveness 3. Insure adequate resources for the organization and protect its assets. Development and fundraising Governance responsibility
* Establish a development plan Management responsibility
* Grant research and applications Protecting assets Governance responsibility
* Assuring that personnel policies and practices conform to the organization mission and to legal requirements Management responsibility
* Implementation of agency policies Whose responsibility?
* Resolution of staff grievances 4. Serve as advocates and ambassadors for the organization
* The members of the board are the public relations staff of the organization 5. Plan for the future The Board is responsible for planning for the future of the organization. The staff provides input and data into the planning process and is responsible for implementing the goals established by the board. “Strategic” planning is not an esoteric process. Thinking “strategically” simply means that planning cannot be done in a vacuum. Organizations operate in an environment that has an impact on what they can and should do. The essence of planning is to set goals
* Who should be served and what they need? Setting objectives How will the organization accomplish these goals? 6. Assuring future board leadership Board Evaluation
* Is there a process to evaluate board members based upon agreed expectations? Board recruitment Recruitment and nominating are the joint responsibility of the Board and Executive Director Recruitment serves multiple purposes
* Board members become advocates for the organization Recruitment should be based on the tasks of the board and the qualities needed to accomplish those tasks:
* Representation 7. Select, evaluate and support The Executive Director
* Is there a job description for the Executive Director? Maintaining a productive board environment Chair and Executive Director A collegial relationship between the ED and the Chair is vital. It is their joint responsibility to provide the information needed to support their respective roles.
* Regular and carefully thought out communication. Structuring of the board agenda
* It is the responsibility of the E D to bring only those items that are within the board’s purview to the board. Committees The leadership must establish clear expectations for each committee based on the principle challenges that the organization is facing.
* Rethinking program priorities? Future leadership
* Is there a process to identify the next chair? Creating a rewarding board environment What makes a board you would want to be a part of?
* Meaningful work Action Steps Set aside a board meeting to discuss basic board responsibilities Establish a Governance Committee It will be their responsibility to:
* propose expectations for individual board members Set aside time to help board members understand the organization’s finances by reviewing the basic agency documents. Current budget Does each board member understand how the budget was prepared?
* Was the budget prepared in accordance with a programmatic plan or is it simply a projection from the last year’s budget? Quarterly Financial report Do the board members understand the financial reports?
* Is the organization ahead or behind the budget? Audit report Do board members understand the audit?
* Has the board reviewed the audit Documents Has each board member seen the basic organization documents?
IRS Form 990 Prepare board members to serve as advocates and Public Relations representatives.
* Every board member should have some regular contact/exposure to the organizations programs. Resources
Board Source
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