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An Introduction to the Standards, Roles and Responsibilities of the Board of DirectorsTo be an efective executive director of an organization, it is helpful to understand the functions of the board of directors and how to work with that group. If you are an executive director, your first contact with the board was probably through the hiring process. The decision to hire you was an exercise of its authority and legal responsibility. Some states refer to the governing board of a not-for-profit as a board of directors or a board of trustees. Whatever the name, the actions of the board are the legal acts of the corporation. Board members individually, and the board as a whole, are held accountable for the decisions of the not-for-profit corporation. Most of their decisions are based on discretion or judgment, often with incomplete information and a degree of risk. There are three generally accepted standards by which a board will be judged: care, loyalty and obedience. The Applied Research and Development International (ARDI) Support Center refers to each of these three standards in detail: The duty of care refers to how an ordinary, prudent person would act in a like circumstance. The decision requires diligent, attentive, informed participation. The duty of loyalty refers to acting in good faith, in the best interest of the organization. This duty raises issues of fairness, standards and conflicts of interest and establishing board procedural safeguards. The duty of obedience ensures that the not-for-profit operates within the laws and rules governing its formation, bylaws and mission as stated in the articles of incorporation. The actions of the board should be consistent with its bylaws and rules. The first article of this series spelled out the functions of the board and explained that the way it exercises its responsibilities can set the tone for how the organization performs, the quality of services it offers, the degree of participation by the board, the communication and degree of participation of people with disabilities in the formation of policy, and the management of the center for independent living, or CIL. These characteristics create an image of how the community perceives the organization. The role of the board of directors in a not-for-profit organization encompasses broad areas of responsibilities in governance and management. The functions of a CIL derived from the research study of the Rehabilitation Research & Training Center (RRTC) on Independent Living Management have been detailed in the September 2006 issue of Independence Today; a review may be helpful. The nine areas that define the functional performance of a CIL are the basis for its operating structure and also clarify the role of the board of directors as to their understanding of these functions and its responsibilities. The objective of the process of further defining each operating function from the perspective of the board’s responsibility is to clarify the board members’ roles and involvement. The following information is derived from the research of the author and the writings of the ARDI Support Center on effective non-profit boards of directors. It’s a useful exercise for each board president to examine each function as a board responsibility. Each of the functions can be assessed, for example, by rating each item on a scale of 1 to 5 with 1 being the lowest and 5 being the highest. Each function can be examined from the level of involvement of the board.
The following are board responsibilities that can be assessed:
Independent living philosophy a. Ensuring a vision of the future
Financial management a. Approving the annual budget
Program and services a. Ensuring there is an organizational vision Community relations a. Determining the importance of publicity to the community
Human resource management a. Determining organizational staffing needs
Administration management (information management) a. Establishing an information inventory management system
Consumer involvement (marketing and public relations) a. Knowing about the organization’s markets Physical plant management a. Developing a physical plant designed to meet program needs
Governance and board affairs a. Defining the board Once the assessment is complete, the board should focus on those areas that rated lowest in an effort to improve effectiveness. There are a variety of self-assessment tools that can be reviewed on the Internet by a search of “not-for-profit boards and assessment.” ******************* Ronald B. House, Ph.D., is a researcher, educator and consultant on not-for-profit organizations and was on the faculty of Cornell University, NYSILR and NYS Human Ecology. |
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