Nonprofit board roles and responsibilities

What a nonprofit board owes the organization, what each officer does, and where governance ends and management begins.

When It Matters

A board of directors is the governing body ultimately responsible for a nonprofit, with specific legal and ethical responsibilities to the organization. Depending on the country and the bylaws, its members may be called trustees, directors, committee members or governors. One national charity regulator says that, in its country, the title changes nothing in law: all properly appointed members of the governing body are trustees and share equal responsibility. Check how your own country treats it.

You will want this page in a few situations. You are setting up a new organization, or joining a board for the first time. Nobody is sure who has authority to decide something, or staff and board are pulling against each other. Or you are the incoming chair or treasurer and want to know what the job really involves. Two things are common. Most bylaws name four officer positions, whatever the size or type of board: chair, vice chair, secretary and treasurer. And nonprofit board members carry three legal duties: care, loyalty and obedience. Check what applies where you work.

How It Works

These are the board's main responsibilities, and setting mission and purpose comes first.

  1. Set and review mission and purpose. The board creates and reviews a statement of mission and purpose that sets out the goals, the means and the primary constituents served. Everything else follows from it.
  2. Provide strategic leadership. With the mission fixed, the board sets the strategic direction of the organization and acts as its ambassador.
  3. Oversee finances and controls. The board helps develop the annual budget and makes sure proper financial controls exist. Members must be able to understand the financial reports put in front of them.
  4. Hire, support and plan succession for the chief executive. The board hires the executive director or CEO, sets their pay, evaluates their performance and gives guidance and support. It should also hold both an emergency succession plan and a long-term one.
  5. Build and evaluate the board itself. That means setting prerequisites for candidates, orienting new members and running a self-evaluation so members can improve how they govern.
  6. Keep the organization legal and ethical. A board has specific legal and ethical responsibilities to the organization. Legal compliance and financial oversight belong on the list, but they are not enough for effective governance on their own.

One widely used framework groups the board's responsibilities under three areas: providing oversight, securing resources and setting strategy.

Key Components

  • Duty of care: the care an ordinarily prudent person would take in a like position, using reasonable care when making decisions as a steward of the organization.
  • Duty of loyalty: faithfulness. Act in the organization's best interests, and never use information you got as a member for personal gain.
  • Duty of obedience: stay faithful to the organization's mission.
  • Chair: leads the board, facilitates meetings, and serves as the day-to-day supervisor and partner of the chief executive, making sure board resolutions are carried out.
  • Vice chair: fills in for the chair when needed and is the expected successor.
  • Secretary: keeps, or oversees the keeping of, minutes and the board's records.
  • Treasurer: oversees finances and the budget, and usually chairs the finance committee.
  • Standing committees: commonly governance, audit, finance and, if needed, executive.
  • Governance versus management: governance is high level, meaning strategy, oversight and accountability. Management is the day-to-day operation of the organization.

Best Practices

Write down each role. A written job description for every board role is best practice. It is also good practice to ask each member to sign a form saying they understand their responsibilities.

Keep the board in governance. Governance is high level: strategy, oversight and accountability. Day-to-day operations are management, and they belong to the chief executive and staff.

Put delegated limits in writing. Boards can delegate to staff, volunteers, committees or individual members, but they cannot delegate their overall responsibility. Set out the limits in job descriptions, role descriptions and committee terms of reference, with clear reporting lines. Decide in advance which decisions are never delegated. High-risk and unusual ones belong there.

Hold the chair to the board's authority. A chair may decide only in line with the governing document or authority the board delegated, and should tell the other members what was decided.

Share the finances. The treasurer leads, but all trustees share responsibility, so everyone should be able to read the reports. The treasurer does not have to be an accountant, and beyond the smallest organizations an outside bookkeeping or accounting firm makes sense for the official books.

Challenge, and read the papers. Do not let personal prejudice or a dominant personality sway your judgment. Members who simply defer are not doing the job. Review the agenda and supporting materials before every meeting.

Name conflicts openly. A conflict of interest is any situation where personal interests could, or could appear to, keep a member from deciding only in the organization's best interests. If a fellow member seems to have one, say so. Doing that does not question their integrity.

Use term limits and stagger them. In one research report just over 87% of nonprofit board positions had term limits. Three-year terms with two consecutive terms allowed are common, and staggering avoids the whole board turning over at once.

Common Mistakes

Drifting into management. In very small or start-up organizations, board members sometimes work as managers. That can be workable, but members in two roles can cause problems between the mission and how the organization operates.

Neglecting external work. Research from one governance network finds boards do well on purpose and financial oversight but struggle with fundraising, advocacy, community-building and outreach.

Weak safeguards. Without proper procedures, an organization is open to fraud, theft or other abuse, and board members risk breaching their duty.

Example

This is an illustration, not a real case. A mid-sized nonprofit run by its founder as director has just formed its first board and must sort out who does what.

The board starts with roles. One member becomes chair and another treasurer, and each gets a written job description and signs that they understand it. The treasurer is not an accountant, so the nonprofit hires an outside bookkeeper for the official books. The whole board still reads the financial reports.

The board then takes a strategic decision: whether to expand into a neighboring area. It checks the idea against the mission, looks at the budget and votes to approve it in principle with a spending limit. The director handles the rest, such as finding a site and hiring local staff, under authority delegated in writing.

The written delegation also lists decisions never delegated. When the director finds a lease that is unusual for the organization, it is a high-risk decision, so the director takes it back to the board. The board reviews the risk and gives final approval, and the chair informs the other members of what was decided.

Further Reading