Empowered, Impactful & Rewarding Nonprofit Board

Transcript:Empowered, Impactful & Rewarding Nonprofit Board:
Empowered, Impactful & Rewarding Nonprofit Board Service Avanti D. Bakane Sufyan Sohel 2 Board Training Objectives Provide background on nonprofit boards; Examine common nonprofit board pitfalls; Review nonprofit board fiduciary duties; Discuss board roles and responsibilities; Consider benefits of board service; and Q&A Session 3 Why do Non Profits have Boards? Board of Directors Purpose Governance Protect the public’s and stakeholder’s interest Carry out fiduciary responsibilities Comply with legal and contractual requirements Develop and monitor policies Hold the CEO accountable Support Assist the organization to achieve its mission and goals by supporting the CEO Ensure the organization has adequate resources Lend special skills Share contacts Act as ambassadors 4 Background on Nonprofit Boards The purpose of the nonprofit board is to govern the organization in order to: Protect the public’s “assets” Ensure the organization accomplishes its mission Board work depends on stage in life cycle, typically includes: Governance, strategy, fundraising Partnering with staff (if any) to do aspects of the work of the organization, as needed 5 Background on Nonprofit Boards Illinois law requires at least three members of the board (directors) Board members should not be compensated for board service Boards should be comprised of a majority of independent directors (not family, employees or business partners) Officers of the board fulfill specialized roles, which should be described in the bylaws Chair or President Vice President (optional) Secretary Treasurer 6 Common Nonprofit Board Pitfalls Top 5 Mistakes Boards Make: Failing to Understand Fiduciary Duties Failing to Provide Effective Oversight (or Providing Deference to EC/Chair/Founder/ED) Micromanaging Staff Operating with Outdated, Inconsistent, Non-Compliant Governing Documents Failure to Recruit Directors without Due Care and without Cultivating Board Diversity 7 Common Nonprofit Board Pitfalls Personal Liability can be found when: Loans to directors Excess Benefits transactions (paying more than FMV) Payroll Taxes Distribution of Assets if insolvent Personal Guarantees Actions taken not in Good Faith or not in the best interests of the organization Director Protections from Personal Liability Business Judgment Rule Immunity Statutes Indemnification 8 Questions to ask: Why does our organization exist? What are our core values and philosophy? What are our core competencies - how are we unique? What benefit to the community do we offer? The Board is ultimately responsible for adherence to legal Standards and ethical norms. Remember the Duties… Care Loyalty Obedience 9 Nonprofit Board Fiduciary Duties Duty of Care The duty to make informed decisions in the