Disclaimer - The page has not been edited yet. The Institute of Non-Theoretical Science is a non-profit organization that has no official recognition from any legal body whatsoever. The named board members have no obligation, legal or otherwise, nor duties, nor privileges as suggested by the text below. This outline is designed to provide a general outlook for their perusal and any agreements will be developed at a future date. The ’Board’ is a necessary developmental strategy toward the end of becoming a bona fide institute within the community of Canada and the World. That being said the appointed board members are encouraged to take any part that they so choose toward the betterment of this University. As a ’Free Institute’ we may never become recognized but every effort will be made to do so. Any person reading this is invited to join us in the pursuit of our ’Constitution’. Namron Soar
There are a variety of views about the roles and responsibilities of a board of directors and most of these views share common themes. This document attempts to portray those themes by depicting various views. Simply put, a board of directors is a group of people legally charged with the responsibility to govern a corporation. In a for-profit corporation, the board of directors is responsible to the stockholders -- a more progressive perspective is that the board is responsible to the stakeholders, that is, to everyone who is interested and/or can be effected by the corporation. In a nonprofit corporation, the board reports to stakeholders, particularly the local communities which the nonprofit serves.
Major Duties of Board of Directors Brenda Hanlon, in Boards We Trust, suggests the following duties (as slightly modified by Carter McNamara to be "nonprofit/for-profit neutral").
1. Provide continuity for the organization by setting up a corporation or legal existence, and to represent the organization’s point of view through interpretation of its products and services, and advocacy for them.
2. Select and appoint a chief executive to whom responsibility for the administration of the organization is delegated, including:
- to review and evaluate his/her performance regularly on the basis of a specific job description, including executive relations with the board, leadership in the organization, in program planning and implementation, and in management of the organization and its personnel.
- to offer administrative guidance and determine whether to retain or dismiss the executive.
3. Govern the organization by broad policies and objectives, formulated and agreed upon by the chief executive and employees, including to assign priorities and ensure the organization’s capacity to carry out programs by continually reviewing its work.
4. Acquire sufficient resources for the organization’s operations and to finance the products and services adequately.
5. Account to the public for the products and services of the organization and expenditures of its funds, including:
- to provide for fiscal accountability, approve the budget, and formulate policies related to contracts from public or private resources.
- to accept responsibility for all conditions and policies attached to new, innovative, or experimental programs.
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Major Responsibilities of Board of Directors BoardSource, in their booklet "Ten Basic Responsibilities of Nonprofit Boards", itemize the following 10 responsibilities for nonprofit boards. (However, these responsibilities are also irrelevant to for-profit boards.)
1. Determine the Organization’s Mission and Purpose
2. Select the Executive
3. Support the Executive and Review His or Her Performance
4. Ensure Effective Organizational Planning
5. Ensure Adequate Resources
6. Manage Resources Effectively
7. Determine and Monitor the Organization’s Programs and Services
8. Enhance the Organization’s Public Image
9. Serve as a Court of Appeal
10. Assess Its Own Performance
For more information about each of these responsibilities in nonprofit’s, see Effective Boards
Govern your nonprofit and manage less
Elected or appointed, volunteer boards of directors who are committed to the organization’s mission and leadership govern nonprofit’s. A nonprofit board determines the mission, strategic direction, and future programming of the organization. A nonprofit board ensures and nurtures adequate human and financial resources and actively monitors and evaluates the organization’s executive director/CEO, as well as service and financial results. Nonprofit board members approve and systematically implement policies to ensure achievement of the mission of the organization and to prevent perceived, potential, or actual conflict of interest.
ROLES AND RESPONSIBILITIES of the NONPROFIT BOARD
Board of directors are trustees who act on behalf of an organization’s constituents, including service recipients, funders, members, the government, and taxpayers. The board of directors has the principal responsibility for fulfillment of the organization’s mission and the legal accountability for its operations. This means that as a group they are in charge of establishing a clear organizational mission, forming the strategic plan to accomplish the mission, overseeing and evaluating the plan’s success, hiring a competent executive director and providing adequate supervision and support to that individual, ensuring financial solvency of the organization, interpreting and representing the community to the organization, and instituting a fair system of policies and procedures for human resource management.
Board members have a duty of loyalty to the organization, its staff and other board members. While differences of opinion are sure to arise, board members should seek to keep disagreements impersonal. By practicing discretion and accepting decisions made on a majority basis, board unity and confidence will be promoted.
Board members accomplish their functions through regular meetings and by establishing a committee structure that is appropriate to the size of the organization and the board. Ideally, board members arrive at meetings prepared and ready to engage in thoughtful dialogue, and there is a group process which generates and uses the best thinking of its members.
Boards should be open to self-evaluation and regularly review their own composition to ensure constituent representation, and board expertise and commitment. Boards also are responsible for evaluating and determining compensation for the executive director.
Under Minnesota law, nonprofit directors are responsible for management of the business and affairs of the corporation. In carrying out their responsibilities, the law imposes on these directors specific fiduciary duties of care, loyalty, and obedience to the law. While Minnesota state law requirements for the specific functions description of board president and treasurer. Please refer to Statute 317A and the document entitled "Fiduciary Duties of Directors of Charitable Organizations".
BOARD RESPONSIBILITIES
The board should engage in ongoing planning activities as necessary to determine the mission of the organization and its strategic direction, to define specific goals and objectives related to the mission, and to evaluate the success of the organization’s services toward achieving the mission.
The board should approve the policies for the effective, efficient, and cost-effective operation of the organization.
The board should annually approve the organization’s budget and assess the organization’s financial performance in relation to the budget at least four times per year.
The board is responsible for the financial health of the organization and should actively participate in the fundraising process through members’ financial support and active seeking of the support of others. As part of the annual budget process, the board should review the percentage of the organization’s resources spent on program, administration, and fundraising, with a goal of at least 70% of revenue used for programs.
The board should hire, set the compensation for, and annually evaluate the performance of the executive director/CEO.
If the organization employs staff, the board should annually review its overall compensation structure, using industry-based surveys of salaries and benefits. The board should ensure that a livable hourly compensation is paid to all employees, whether full- or part-time. The board should ensure that sufficient funds are allocated to contribute to full-time, permanent employees’ medical insurance and retirement plans. The board should establish policies, when appropriate, on employee benefits, vacation, and sick leave.
The board should approve written policies and procedures governing the work and actions of its employees and volunteers. These polices and procedures should address the following: working conditions; evaluation and grievance procedures; confidentiality of employee, volunteer, client, and organization records and information; and employee and volunteer growth and development.
The board should ensure that an internal review of the organization’s compliance with known existing legal, regulatory, and financial reporting requirements is conducted annually and that a summary of the results of the review is provided to the entire board.
The board should periodically assess the need for insurance coverage in light of the nature and extent of the organization’s activities and its financial capacity. A decision to forego general liability insurance coverage or Directors and Officers liability insurance coverage should be made only by the board of directors.
