Board Governance 101

In general, governance refers to the implementation of policies, procedures, and processes by which an organization is being governed. Governance is not a singular system, but rather composed of various key components and includes multiple actors or stakeholders, each with their own distinct roles and responsibilities.

When it comes to nonprofit organizations, their success is determined not only by the qualities and skills of the upper management and personnel but also by the competencies of board members in charge of governance.

Board members are expected to promote a strong company identity among employees when fulfilling their board member responsibilities in nonprofit governance. Employees’ level of knowledge of their company and their behavior are shaped by organizational identity. Other governance board responsibilities include ensuring that the organization has sufficient resources to carry out its goals and vision. Another is to provide oversight and responsibility in order to guide the organization toward a sustainable future.

Regarding the governance roles and responsibilities in a nonprofit governance structure, here are the 10 basic responsibilities of board members:

• Ensure that strategic planning is in line with the organization’s vision, develop a mission statement, and define the organization’s purpose
  
• Identify appropriate candidates, conduct interviews, hire the most qualified chief executive, as well as define the job expectations for the position
  
• Review and approve the budget and project expenses to ensure that they are reasonable in light of the organization’s financial performance and economic activity
  
• Determine if the organization has sufficient resources to carry out its mission as well as ensure appropriate stewardship
  
• Conduct a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis for short- and long-range planning for the organization
  
• Comply with laws and legal standards
  
• Manage the organization’s assets and use them to generate value for the stakeholders
  
• Identify and recruit new board members and appraise boardroom performance
  
• Develop a reputation management strategy and establish shareholder engagement
  
• Strengthen programs and services, evaluate their effectiveness, and make sure they stay in line with the mission and goals of the organization

A governance committee checklist outlines the main responsibilities of a government committee, which is usually made up of no more than five board members. The governance committee structure ensures that the board is operating at peak efficiency and that board processes are being followed.

Board Governance Framework

A corporate governance framework is a set of guidelines for the board of directors on how to conduct business in a transparent and trustworthy manner that benefits all stakeholders. The rules, procedures, and processes by which a company is regulated and controlled are included in a corporate governance framework template. A governance framework template, or a governance framework diagram, might come in handy. This might be helpful when constructing a model that describes the board’s objectives and responsibilities, as well as key organizational processes.

The Deloitte Governance Framework was created to assist organizations in identifying opportunities where they may improve their effectiveness and efficiency. The Deloitte Governance Framework may help reduce the risk of important board tasks being overlooked. This framework also establishes the functions and responsibilities of an effective governing board. A good governance framework can be used to assess governance processes and may help prevent organizational oversight.

What are the elements of a governance framework? A governance framework consists of various elements. For example, it may include project management contracts and agreements between the organization and stakeholders. It may also offer suggestions for balancing opposing stakeholder interests through the development of corporate social responsibility guidelines. Finally, it may provide recommendations to ensure proper information flow and to maintain checks and balances.

Board Governance Best Practices

Board governance is critical to an organization’s success. In general, board governance refers to a set of principles, methods, and processes that are required to make strategic decisions in the organization’s best interests while also providing oversight and accountability. It is important to note that board governance best practices may change over time, which means that the corporate governance best practices 2020 may no longer be applicable in a few years.

When it comes to board governance best practices, here are a few practices that can be adapted and implemented right away:

• Set a time limit for board meetings – This means that board meetings may not exceed the agreed time limit without the unanimous approval of the board members. This can help board members focus on the meeting agenda and prioritize the most important topics for discussion.
  
• Engage with board members at informal gatherings – Getting to know board members in a relaxed setting can help foster positive relationships among members and promote trust.
  
• Conduct virtual or hybrid meetings – Virtual or hybrid meetings can help facilitate transparency and shared understanding among team members. Online meetings can also help organizations maintain performance and ensure collaborative decision-making even in a remote setting.
  
• Utilize dashboard reports – Dashboard reports can measure critical variables within an organization. In addition, a data dashboard can keep everyone in the organization up to date on what is going on and make data-driven decisions.
  
• Conduct a process check – Board evaluations can help enhance board effectiveness, strengthen the board’s relationship with management, and bring in mutual accountability for the individual behaviors of board members.

Board Governance vs Management

Although the terms governance and management are sometimes used interchangeably, there is a difference between nonprofit board governance vs management. To illustrate the relationship between governance and management, governance is concerned with setting rules and giving required guidelines to steer an organization’s direction. Management, on the other hand, is concerned with making decisions at various levels to bring about the desired change.

Regarding the difference between board of directors and management, the board of directors ensures that the organization is on the right track. They help oversee the entire organization by addressing broader, mission-focused activities. The management, meanwhile, is responsible for the organization’s day-to-day operations and is expected to carry out the decisions made by the board of directors. In a nutshell, the relationship between board of directors and management is that the board of directors delegates responsibilities to the board of managers, and the management fulfills the roles assigned to them.

Board Governance Best Practices Nonprofit

What is board governance? Board governance definition refers to the framework that gives structure to a board and how it operates. Board governance defines the roles and responsibilities of board members and executives.

To illustrate the difference between nonprofit board governance vs management, governance pertains to the duties and responsibilities of the board of directors, while management is concerned with the organization’s daily operations. Governance answers the “what” questions such as what the organization does and what kind of organization it is developing into. Management, however, is concerned about “how” the plans and works of the organization may be delivered to its intended beneficiaries.

By using the best practices checklist for nonprofits, organizations may be able to assess their strengths and weaknesses and how to achieve growth. Organizations may also refer to the best practices of highly effective nonprofit boards as a reference for how their nonprofit board can operate more effectively. Identifying nonprofit policies and procedures as well as setting realistic goals to achieve the mission of the organization, are essential components of any organization’s success.

Here is a list of the five most common nonprofit board governance models:

• Advisory Board Model – The advisory board brings professional skills and talents to provide guidance and recommendations to the governing board of directors. Nonprofit organizations may have one or more advisory boards.
  
• Cooperative Governance Model – A cooperative governance model provides all members an equal vote. This model is particularly useful for nonprofit organizations with no assigned president or chief executive or without major shareholders.
  
• Policy Board Model – In this model, the board of directors is second to the CEO in terms of overall influence. This model separates the CEO and the board of directors as independent entities, allowing boards of directors to fulfill their accountability obligations to the organizations they govern.
  
• Patron Governance Model – This model is similar to the Advisory Board Model, but with a few differences. The board members, for example, have less power over the chief executive officer than in the Advisory Board Model. In addition, in a Patron Governance Model, board members are primarily concerned with fundraising. Board members donate their own funds to the organization and persuade others in their network to do so as well.
  
• Management Team Model – Different committees for each board function may be established by a nonprofit organization with a management team model. This indicates that the nonprofit follows the same processes as a for-profit business.

Board Governance Consulting

A nonprofit organization can benefit greatly from the services of a certified nonprofit consultant. When performing their functions, nonprofit board governance consultants may face various challenges. These include managing endless emails for board communications, tracking missing files and association records, holding meetings without a clear agenda, and accomplishing little, as well as accountability and oversight issues. 

Organizations can learn from high-performing nonprofits such as McKinsey when developing their growth strategies. The McKinsey governance model, for example, may provide insight into how nonprofits may fulfill high professional and ethical standards. In addition, in order to improve board effectiveness, it may be good to consider the McKinsey board of directors’ client selection policies and the McKinsey advisory board to enhance board effectiveness.

Moreover, adopting new technologies and digital solutions such as a board management platform can allow nonprofit organizations to better manage their board members, enabling them to accomplish mission-critical tasks more effectively.

Boardable’s all-in-one platform can support organizations with their board operations and streamline board governance. For example, Boardable Spotlight is a fully integrated video conferencing system that can help organizations run successful virtual and hybrid meetings for improved board member engagement and collaboration. Get started for free today.

If you want to run a successful nonprofit association board, management should be structured so that each board member has their own unique set of responsibilities. Board members behave like a governing body and form a board of directors. So, what are the positions on a board of directors for a nonprofit? At Boardable, we recognize the roles and responsibilities of a board of directors in corporate governance as being divided into four leadership categories: chairperson, vice-chair, secretary, and treasurer. You can learn more about a board of directors’ roles and responsibilities, or keep reading for more information about the role of a board of directors in nonprofit organization settings.

Besides the different leadership positions, you can also have multiple types of board of directors based on the model of board governance you decide to use. We have identified six main types of governance models: advisory, patron, cooperative, policy, community engagement, and hybrid. No matter which board model you choose, there are usually a few common best practices to keep in mind, as following them will help you maintain a proactive board. For example, you can regularly survey your board about its needs, keep job descriptions for the board up to date, form succession plans, and have a way, method, or system you can use to assess the success of your board as a whole.

Additionally, the typical association has specific nonprofit (i.e. 501c3) board of directors’ rules that either focus on resolving issues or answering recurring questions. Some of these policies are based on things like whistleblowing, conflicts of interest, gift acceptance, and item acceptance. A policy that can address potential conflicts of interest is especially crucial if you want to avoid compromising your organization’s trust with the public. Breaking this trust could not only damage your association’s credibility but also stall the momentum towards accomplishing your goals.

Nonprofit Board Structure Chart

The typical nonprofit board structure chart or nonprofit organizational chart is topped by four leadership positions, one of which is the board chair, which oversees the entire board of directors and corresponding committees to make sure the nonprofit is on track to reach its goals. The board chair also takes fiduciary responsibility when it comes to monitoring donations to the organization, large gifts given to the organization, and employee payroll.

Other nonprofit board of directors’ positions in leadership includes vice-chair, secretary, and treasurer. These roles are usually included even in a small nonprofit board structure chart or nonprofit organization structure template. Underneath these leadership roles, board committees can also be formed. The board committee structure, roles, and responsibilities vary based on your board’s needs, and they can help you divide up the workload equally across the board. You might consider that having an appropriate number of committees is one of the multiple best practices of highly effective nonprofit boards because they can make your goals and responsibilities easier to manage.

Association Of Governing Boards

Boards are not confined to only nonprofit organizations. There are lots of industries whose organizations can benefit from forming these boards, such as those in the for-profit, trade, education, and healthcare sectors. These organizations tend to be mission-driven, and they can make use of boards to accomplish their goals.

You may be familiar with the AGB, formally known as the Association of Governing Boards of Universities and Colleges (Glassdoor’s company overview) or simply the Association of Governing Boards. You may also be familiar with a similar organization called the ACCT, whose full name is the Association of Community College Trustees (sometimes referred to as the Association of College Trustees). These are some examples of organizations of governing boards in higher education.

An AGB search turns up the AGB website, which says it is an organization that empowers college, university, and similar boards to engage in association governance confidently. Somewhat of a board of universities, the AGB (and similarly, the ACCT) focuses on supporting each university governing board associated with its organization. These organizations highlight the importance of school boards in general and their impact. This is just one type of candidate that could benefit from a board management solution and use it to improve their school board experience overall.

Association Of Governing Boards Of Universities And Colleges

A simple focused AGB search for the AGB group (the Association of Governing Boards of Universities and Colleges) shows that in some ways, it could be seen as a kind of “board of universities”. The Association of Governing Boards of Universities and Colleges describes itself as an organization that supports a variety of governing boards in higher education by providing resources, hosting educational events, and offering consulting services. The ACCT or Association of Community College Trustees (i.e. Association of College Trustees) is an organization with similar goals.

Circling back to the idea of a board of directors (in the context of nonprofit organizations) previously mentioned, you can also take note that a college governing body is normally called a board of trustees (rather than directors). Even though every board is different and the purpose of each board varies, the typical university board of trustees’ responsibilities and the usual board of directors’ responsibilities are all rooted in practical, legal, and ethical duties. Organizations like the AGB and ACCT exist to support the boards of trustees of different universities so those institutions can check off all of their responsibilities as boards. Likewise, our services are designed to further support educational boards, just on the software front.

10 Basic Responsibilities Of Board Members

You will see that there are several board member roles and responsibilities that show up in both nonprofit and for-profit boards. This rounds out to about 10 basic responsibilities of nonprofit boards or 10 basic responsibilities of board members in general. For most boards, the basic ideas behind nonprofit board member roles and responsibilities are not very different from other board member responsibilities (for-profit organization duties).

To start, what are the 3 primary responsibilities of board members? These basic board member duties, also known as core legal responsibilities, include the duties of care, loyalty, and obedience. For the most part, these duties exist to ensure your board stays trustworthy and effective.

Adding onto these core responsibilities, board members are also expected to follow a few standards: 

• Advance the mission of the organization
• Fulfill legal and fiduciary responsibilities
• Prepare for meetings
• Hire and oversee the executive director
• Recruit new members
• Adopt reliable communication tools
• Serve on committees

Beyond these standards, you will also find certain policies connected to nonprofit board of directors’ roles and responsibilities. If you are wondering who should NOT serve on a board of directors, it is safe to assume that it would be anyone who is unable or unwilling to follow these guidelines.

Board Member Roles

As a refresher, what are the 3 primary responsibilities of board members? First, the duty of care is about how members should commit themselves to fulfil their promises and assisting the organization as much as they can. Second, the duty of loyalty highlights how members should also act as ambassadors for the organization by supporting its work and embodying its mission; this includes setting personal interests aside. Third, the duty of obedience says that members are obligated to follow the guidelines of the organization as they are listed in its governance documents.

Nonprofit board of directors positions and board member roles, in general, are heavily influenced by the core tenets or duties we just mentioned. The list of basic board member responsibilities (for-profit organizations excluded) goes on to include the qualities of a good nonprofit board member. This kind of person is:

• Passionate about the cause
• Eager to participate
• Prepared for events
• Excited for committees
• Expressive of ideas
• Curious to learn
• Desires stewardship
• Creative
• Communicative and/or cooperative

Board Member Positions Nonprofit

While the board member responsibilities (for-profit vs nonprofit) may differ from organization to organization, every for-profit and nonprofit board of directors serves as a force of governance above all else. This is the reason why many board member positions (nonprofit and for-profit) in terms of leadership are nearly identical. You can sum up the main for-profit and nonprofit board member roles and responsibilities as the positions of chair, vice-chair, secretary, and treasurer. 

Perhaps you are interested in becoming a board member or learning about volunteer board member positions, and you are considering looking up “nonprofit board positions near me”. You may want to keep a few things in mind as you continue along your journey. First, remember the 3 core responsibilities that apply to every board member. Second, know the other 7 standards that a potential board member such as yourself would be expected to follow. When you feel confident and ready to fulfill all of these responsibilities, revisit and review the qualities of a great nonprofit board member. Do these qualities fit your description, character, and personality? If they do, you can move on to thinking about which role you see yourself as being best suited for in your preferred organization.

At Boardable, we understand the roles and responsibilities of a board of directors. This is why we created a board management platform that encompasses the entire meeting lifecycle that will increase board engagement and collaboration. Start free today with Boardable.