Overview of Roles and Responsibilities of Corporate Board of Directors
Written by Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Copyright 1997-2008.
Adapted from the Field
Guide to Developing and Operating Your Nonprofit Board of Directors.
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.
(Be sure to also review information in the sections Sample
Job Descriptions
and Board and Staff Roles.)
Major Duties of Board of Directors
Seven Areas of Responsibility
Major Duties of Board of Directors
Brenda Hanlon, in 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.
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 arelevant 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
nonprofits, see
Effective
Boards
Additional Perspectives
What is the Role of Governance? (click on Board Development and scroll down)
Governance and Developing Your Board of Directors
Examination
of the Relationship Between CEOs and Directors
For the Category of Boards of Directors:
Related Library Topics
Recommended Books
For-Profit ("Corporate") Boards of Directors
For-Profit ("Corporate") Boards of Directors
The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just hover your cursor over the image of the book. A "bubble" of information will be displayed. You can click on the title of the book in that bubble to get more information, too.
Nonprofit Boards of Directors
Field Guide to Developing and Operating Your Nonprofit Board of Directors
- by Carter McNamara, published by Authenticity Consulting, LLC. Provides step-by-step, highly practical guidelines to organize, operate and sustain high-quality nonprofit Boards. Includes roles and responsibilities, how to get the best members and also how to train and organize them, ensuring high-quality meetings, evaluating Boards, and much more! Includes guidelines to improve a Board that is struggling and also guidelines to evaluate and/or replace the Executive Director. Many materials in this Library's topic about Boards are adapted from this book.
Field
Guide to Leadership and Supervision With Nonprofit Staff
- by Carter McNamara, published by Authenticity Consulting, LLC. Provides step-by-step, highly practical guidelines to recruit, utilize and evaluate the best staff members for your nonprofit. Includes guidelines to effectively lead yourself (as Board member or staff member), other individuals, groups and organizations. Includes guidelines to avoid burnout -- a very common problem among nonprofit staff. Many materials in this Library's topic about staffing are adapted from this book.
Field
Guide to Consulting and Organizational Development With Noprofits
- by Carter McNamara, published by Authenticity Consulting, LLC. Provides complete, step-by-step guidelines to identify complex issues in nonprofit organizations and successfully resolve each of them. This book is also helpful to organizations that are doing fine now, but want to evolve to the next level of performance. This is one of the truly comprehensive, yet practical, books about this complex subject! Includes online forms that can be downloaded. Many materials in this Library's topic about guiding change are adapted from this comprehensive book.
Field
Guide to Nonprofit Strategic Planning and Facilitation
- by Carter McNamara, published by Authenticity Consulting, LLC. Step-by-step guidelines to customize and facilitate planners to implement the best strategic planning process to suit the particular nature and needs of their nonprofit. This is one of the few books, if any, that explains how to actually facilitate planning. Includes many online forms that can be downloaded and used by planners. Many materials in this Library's topic about strategic planning are adapted from this book.
