Board Roles and Responsibilities in a Non-Profit Organization

| January 3, 2014

board_roles_nonprofitA nonprofit board of directors has three roles: (1) Setting organizational direction; (2) Ensuring the organization has the necessary resources to do its work; and (3) Providing oversight.

Setting Organizational Direction

It is the responsibility of the board to establish the mission of the organization and to write a mission statement. The mission statement should reflect the organization’s purpose, goals and who it serves. It is important to review the mission statement at least once each year to ensure the organization has not drifted from its purpose. It is perfectly alright to change your mission statement, but this should be the result of conscious decision making and not the result of inattention.

To set the direction of the organization, most organizations find it helpful to engage in strategic planning. Strategic planning provides an opportunity to look toward the future and ask the question, “Where do we want to be three years from now?” Then, after the plan is developed, it is the board’s role to ensure the organization is working toward its goals. Note that the board is not responsible for implementation of the plan — those efforts are usually a part of tactical planning which is the responsibility of the CEO.

It is the role of the CEO and staff to implement programs and services within the organization, but it is the role of the board to monitor the programs and services for effectiveness. As part of this monitoring, the board will want ensure that programs are in alignment with the organization’s mission.

Many nonprofits and ministries find that the lines between board responsibilities and staff responsibilities become blurred over time. This happens for a multitude of reasons. In my opinion, one of the best strategies to ensure boards know their specific roles and responsibilities is through education. Spend some time educating your board members; they will become more effective and engaged as a result.

Ensuring the organization has the necessary resources

The board of directors has the responsibility of ensuring the organization has the necessary resources to fulfill its mission. First, the board has the responsibility of identifying the resources that are needed. In other words, what resources do we need to fulfill our mission? Then, the board needs to establish policies for how the resources will be acquired—will the organization engage in special events fundraising, will it write grants, and if so, who will it accept grants from? As part of the policy development, the board will also need to determine how board members will participate in resource development. For most successful nonprofits, this means that the board members are expected to contribute financially to the organization.

In addition to ensuring the organization has the financial resources it needs, the board of directors is also responsible for ensuring the organization has the human resources it needs to fulfill its mission. This is done through the selection of the Chief Executive Officer, supporting him or her and evaluating his/her performance on an annual basis. It is important to note that the Chief Executive Officer reports to the board of directors, but any other staff or volunteers report to the CEO or their designated supervisor.

Finally, it is also important for the board of directors to ensure the organization has the resources it needs with a public positive image. An accurate and positive reputation will influence organizational resources at all levels. As part of this responsibility, the board will also need to ensure that all organizational stakeholders are kept informed of “happenings” (both positive and negative) within the organization.

Providing oversight

The board has the responsibility to provide oversight in several key areas.

Program Oversight –While the board is not involved in direct program implementation, they are responsible for planning, monitoring and evaluating programs and services offered by the organization. They may ask if the programs and services are in alignment with the organizational mission and if they are meeting an identified need in the community. The board is also responsible for evaluating the effectiveness of the programs and services offered. In other words, are the programs making a difference in the lives of those served?

Financial Oversight –The board of directors is directly responsible for providing oversight of the finances of the nonprofit. It is part of their role to establish budget guidelines, approve an annual budget and oversee the management of the organization’s finances. Additionally, it is the board’s responsibility to ensure the organization has the funds needed to fulfill its mission.

Risk Management – We don’t like to think that “bad things happen in nonprofits,” but they do. It is the board’s responsibility to ensure that there are systems and policies in place to minimize the risks that nonprofits can encounter. Such systems include internal financial controls, financial policies, human resource policies, etc. The key is that once these policies are in place, it is the responsibility of the board to ensure they are being enforced.

Legal and Moral Oversight –It is the responsibility of the board to ensure the organization is in compliance with all federal, state and local laws. It is also the board’s responsibility to ensure the organization is acting in accordance with its stated values, avoids conflicts of interest, and has accountability.

Evaluation of the Chief Executive Officer –Since it is the board’s responsibility to ensure the necessary resources are in place, including human resources, it is also their responsibility to evaluate the chief executive officer on an annual basis.

Finally, remember that these board roles and responsibilities are not optional – they are discussed and mandated by the Internal Revenue Service for all nonprofit organizations.

Category: Non-Profits

About the Author ()

Email | Website | Deborah DiVirgilio is a Certified Governance Trainer through BoardSource and has more than 20 years of experience in providing nonprofit consulting, grant writing and management services for nonprofits, government agencies and faith-based organizations. She is the owner and principal consultant of The Faith-Based Nonprofit Resource Center (formally known as DiVirgilio & Associates). She holds a Bachelor’s Degree in Behavioral Sciences from Wilmington College and a Masters Degree in Non-Profit Management from Regis University, and is Grant Professional certified by the Grant Professional Institute. She has served on the Board of Directors and as an officer of the Grant Professionals Association.