How To Distinguish A Working Board From A Governing Board
Many boards call themselves working boards, indicating that they are more like a group of active volunteers than a governing entity. But what is the real distinction?
The truth is that working boards are governing boards. Just like governing boards, working boards are responsible for the big picture strategy and policies of an organization, but the members of a working board actually implement those strategies, whereas members of a governing board do not.
The Challenges of a Working Board
Working boards are most common in small organizations or community groups that do not have the funds to hire paid staff. The individual members of the board implement the organizations mission and their reach is limited to the number of arms at the table. This administrative burden affects board members time and attention and can make the board less attentive to strategy and less likely to undertake larger initiatives.
Working boards flourish if the board has enough members and if it secures partnerships for bigger projects. However, in order to implement these measures, the board is still constrained by the time and energy of its initial members.
The Role of a Governing Board
Making the Transition
Regardless of the boards classification, communication and organization are critical. Its important to have a solid system to track and manage the activity of both the collective board and its individual members.
How Are Nonprofit Boards Structured
While new nonprofits are left to structure their board from scratch, existing organizations may need to restructure their boards as they grow and expand their team. While you already learned about the different officers who serve on your nonprofit board of directors, they dont make up the entire group.
Most of the time, nonprofit boards of directors are structured with a number of committees. These committees allow boards to tackle nominations and governance, finances and risk, and executive decisions. A current trend in the sector is to have three committees on the board. This committee structure is easy and manageable, making it simple to streamline tasks.
The following committees generally make up this three-part structure:
- Governance Committee: The Governance Committee recruits new board members and determines the performance of the board as a unit. Essentially, this is the committee that governs and oversees various board activities.
- Internal Affairs Committee: The Internal Affairs Committee is responsible for the finances of the organization, including budget review, capital acquisitions, personnel, and other such activities.
- External Affairs Committee: The External Affairs Committee is in charge of communications, marketing, and PR with the community. This committee is also in charge of fundraising, an essential part of board engagement.
Key Differences Between A Working And Governance Board For A Nonprofit
You may have heard of a working board before. It is a common phrase said in the nonprofit space where many organizations work with a small or nonexistent staff and a slim budget. The board of directors is a fundamental feature of nonprofit strategy, planning, and operation. From the board of directors comes the governance that the CEO and their staff execute in day-to-day operations. The board serves as a fiduciary responsible for fulfilling financial and legal responsibilities, but it also serves to guide an organizations culture, strategy, efficiency, and mission sustainability. It is from their oversight and guidance that the CEO leads an organization. It is essential for nonprofits of any size to have a strong organizational structure, starting with the board of directors. This starts from and trickles down from the board of directors. So what is truly meant by a working board in relation to a board of directors and what implications does this have on the organization? We will examine definitions of the two types of boards and then take a look at three key differences to understand between a working board and a board of directors.
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Legal And Fiduciary Responsibilities
Your nonprofit board of directors is the legal governing body of the nonprofit. This means they may need to make some legal decisions concerning the organization. Your board needs to be aware of all of the legal requirements that apply to the organization and oversee that those requirements are met.
For example, your board of directors should be aware of the repercussions associated with overpaying individuals at the organization or participating in political lobbying. While board members probably wont be the ones to actually submit your tax forms, theyre in charge of ensuring that theyre completed annually as well.
Roles And Responsibilities Of The General Counsel Or University Counsel
The General Counsel at some colleges and universities may be referred to as the University Counsel. This position is filled by an attorney with expertise in matters regarding higher education and other issues related to campus activities. The attorney who fills this position must be a person with strong ethics and integrity.
The University Counsel may consist of one or more attorneys who manage legal conflicts between administrators, faculty, staff, students or other constituencies. Attorneys are often present at board meetings to advise the board of trustees on matters of institutional policy. Under the best of circumstances, the board of trustees will develop a trusted relationship with University Counsel so they will be sure to receive early warning of any potential legal problems. Regular and routine meetings between trustees and attorneys develop the necessary foundation for a mutually trusting professional relationship.
The University Counsel often works closely with the CEO or President to address legal matters that surface in campus operations, bringing such matters to the board of trustees as necessary.
Attorneys for the University Counsel should have access to all reasonable means of obtaining information on which to base their advice and opinions, so they can fulfill their responsibilities to protect and preserve the legal interests of the college or university.
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Different Types Of Boards
There are several common types of boards each having distinguishing characteristics:
Collective The collective is a group of people with a shared focus or purpose. They make decisions collectively and each individual represents themselves and their own interests.
Governing boards
The board leads the organization using authority to direct and control provided by the owners and the legal act of formation. They set initial direction and have the full authority to act in the owners best interests. Governing boards function at arms length from the operational organization. They focus on the big picture, future-oriented and act as a single entity.
Working boards The board leads the organization but also does double duty as the staff. These are common in very small organizations and community based organizations that do not have the resources to hire employees. Working boards often get caught up in project management and set aside the governing function.
Advisory boards The board serves to provide insight and perspective to any decision maker including boards. An advisory board typically does not have authority of its own but works to educate some person or body.
Fund Raising boards The board is often only a board in name alone. Its real purpose is to use its members connections and influence to solicit resources for the organization.
Clarify Roles And Responsibilities
A significant issue for governing boards seems to be the very act itself: governing. Board members may be comfortable focusing on details and program particulars getting down in the weeds, so to speakbut engaging in higher-level thinking and scrutinizing the organizations affairs may be less intuitive.
Members of a nonprofit board always wear two hats . First, the board must govern: set the direction, make policies and provide resources to keep programs running. Second, board members, as individuals, typically serve as program volunteers, wearing a very different hat as an unpaid staff person. This work can be technical or simple . Switching back and forth between governing leader and volunteer implementer can cause confusion. In many cases, board members tend to veer toward the support role, which is often the more hands-on role. However, participation as an unpaid staff member will never eclipse the number one job of providing direction to and oversight of the land trust on behalf of the community at large.
When staff is in place, the boards role should be to establish policies and parametersand then step back, giving staff the leeway they need to implement them, says Tim Jacobson of Visjonær Consulting.
Ausbon Sargents executive director, Debbie Stanley, helps her board members with cultivation and stewardship of donors. At the land trust holiday party, for example, she made sure the board members spoke to donors and personally thanked them for their support.
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A Working Board Is Typically Found In An Organization With Highly Limited Or No Staff
This one may seem similar to our first key difference above, but from this statement, we can understand the environment most working boards exist in and what that means for those board members. A board is often a working board out of necessity. If a nonprofit does not have a staff, then the board has to implement its own directives. We know that a solid majority, anywhere from 66% to 70%, of nonprofits in the United States operate with a budget of $1,000,000 or less, and many of those work with less than $500,000. Hiring a full-time staff may be a priority for these working boards, but it is not financially feasible. From this, we can assume that a majority of working boards are working because of low revenues. This situation creates a challenging cycle in which board members must spend additional time implementing their strategies where a traditional board of directors can spend this time focusing on their fundraising capacity as we examined above.
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Roles And Responsibilities Of The Treasurer Or Comptroller
The treasurer at a college or university is sometimes given the title of comptroller. Some schools have a comptroller and a treasurer or Chief Financial Officer . The treasurer is a member and officer of the board. Typically, the treasurer or CFO is responsible for directly paying bills and invoices and managing bank accounts, loans and credit cards. The comptrollers responsibility lies more in overseeing the colleges financial transactions, reports and overall financial health.
The comptrollers duties vary by institution and should be outlined in the boards job description for the position. In general, the treasurer or comptroller helps the board to establish budgeting priorities that correspond to strategic planning goals and objectives. The comptroller is a financial expert who helps the trustees to analyze and understand financial reports in order to assist them in decision-making. As all trustees have fiduciary responsibilities, the treasurer or comptroller helps the board to make sound decisions for allocating institutional resources. Duties and responsibilities include establishing and monitoring internal controls according to approved procedures for processing financial transactions.
As part of their responsibility for oversight, treasurers regularly review financial records to be sure that financial transactions are being recorded accurately and on a timely basis.
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Examples Of Governing Board In A Sentence
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The Governing Board may make a formal approach to another school, to ask for help or the LA Governor Services team or the Diocese.
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This solicitation as well as any resulting contract is issued under the authority of the Governing Board or designee.
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If the whole Governing Board is aware of the substance of a complaint before the final stage has been completed, the school will arrange for an independent panel to hear the complaint.
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An exception to this requirement may be made as authorized in Governing Board policy.
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The OPB 45 day review process will be initiated on May 10, 2013 by the TTC and is scheduled to be ratified by the Governing Board on June 27, 2013.
Roles And Responsibilities Of The Board Of Trustees
Simply put, the board of trustees is the governing body of colleges and universities. Their role in governance encompasses many duties and responsibilities. Many universities also expect their trustees to serve on the board of other organizations that are related to the university. The board is responsible for strategic planning and oversight of the CEO or president, who is responsible for carrying out the plans of the board of trustees.
Under the leadership of the board chair, the trustees offer advice and counsel to the CEO or President.
As the final authority for college or university business, trustees make all legal and fiduciary decisions, although they delegate some specific powers and duties to others. The board of trustees is responsible for developing and approving the schools mission, strategic goals and objectives, and establishing policies related to programs and services.
Another duty of trustees is to approve the annual budget and to set major program fees.
Private colleges and universities nominate and elect their own trustees, whereas public colleges and universities elect some of their own trustees. Governmental agencies often appoint a specified number of trustees to the boards of public universities.
The job of the board of trustees in todays educational realm is challenging because of the volatility of harsh economic times and rapidly changing governance and regulatory concerns.
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Board Roles And Responsibilities
Board members are the fiduciaries who steer the organization towards a sustainable future by adopting sound, ethical, and legal governance and financial management policies, as well as by making sure the nonprofit has adequate resources to advance its mission.
One of the most important responsibilities for many boards is to hire and set the compensation of a talented CEO/executive director to run the day-to-day management activities of the organization. When there are paid staff in place, rather than steer the boat by managing day-to-day operations, board members provide foresight, oversight, and insight: think of them as up in the crow’s nest scanning the horizon for signs of storms or rainbows to explore, perhaps with a pot of gold at the end! Yes, board members – your role as stewards of the nonprofits DOES involve fundraising. And…at the National Council of Nonprofits we are big promoters of the important role board members play as advocates for the nonprofit’s mission.
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Why Are Nonprofit Boards Important
As we mentioned earlier, your nonprofit board of directors is in charge of the governance of your organization while your executive director and team members handle the day-to-day operations. But what is the difference?
- Governance: Governance of nonprofit organizations covers the oversight for organizations, large-scale planning, and overall direction of the nonprofit.
- Management: Nonprofit management is what covers the day-to-day operations of the organization. Essentially, the executive director and team members take care of the regular activities that put the vision determined by the board of directors into operation.
Nonprofits need a board of directors for a variety of reasons. Not only is the members wealth of knowledge and experience invaluable to the organization, but they are also necessary for essential tasks like applying for bank accounts, filing annual reports, and making important purchases.
Additionally, they act as the guiding voice for large decisions like approving annual budgets, borrowing money, and setting plans for major growth or reorganization.
Of course, this explanation oversimplifies the concept of recruitment. In the next section, well take a deeper dive into the recruitment process for your organizations board members.
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What Are The Responsibilities Of A Nonprofit Board Of Directors
As a whole, when people become board members for nonprofits, they are expected to take on a number of responsibilities for the organization. Essentially, there are four different responsibilities of nonprofit boards of directors: legal and fiduciary responsibilities, board meeting attendance, executive compensation decisions, and committee service.
Education For Board Members
Not everyone is familiar with the roles and responsibilities of board members for a charitable nonprofit and fortunately educational programs for board members abound. The harder issue is asking volunteers to take time to learn about their role and grasp what makes a great board member. Luckily there are watch-from-your-computer options, although in-person, and especially peer-to-peer programs, are often the most useful and fun.
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What Is A Nonprofit Board Of Directors
A board of directors, also known as a nonprofit board, is the governing body of a nonprofit. The members of a nonprofit board focus on the high-level strategy, oversight, and accountability of the organization. This contrasts with employees or managers who oversee the day-to-day operations of the nonprofit.
The individuals who make up your board of directors are responsible for making key decisions that address the organizations mission, strategy, and goals. They aim to address the publics interest through the organizations work and act as the legal voice for the organization.
While nonprofit boards typically range anywhere from three to fifty members, there are a handful of roles and positions that are almost always assigned to different members of the board.
Here are three common officer positions that make up the boards leadership:
Generally, these members of your board of directors meet a few times throughout the year to make decisions and ensure the organization is on track. The law varies state by state as to how often the entire board of directors should meet, but most require them to meet at least once every year with all members in attendance.
Effective Governance: The Roles And Responsibilities Of Board Members
Corresponding author:Copyright
Running a health care organization is a team sport. It is very important that all members of the teamwhether on the medical staff, in management, or on the boardunderstand the role of governance and what constitutes effective governance. Many misunderstandings about the roles of boards exist. Many people think that board members are paid, for example, which is not true.
Don L. Arnwine
My interest in the subject of governance began when I became chief executive officer of an organization that was to establish a major health care and medical educational program in West Virginia. Five organizations merged to create the new organization 5 boards also merged to create 1 board of 56 members. Two years after the merger, we created a governance committee to study the subject, and that’s when my interest in governance began. While CEO of the Voluntary Hospitals of America, which grew from 30 to 850 hospitals during my tenure, I had the opportunity to visit with many boards. More recently, I have given 15 to 20 board retreats annually and have been an advisor to the Governance Institute. If I were allowed to focus on only one subject during the rest of my career, it would be governance.
In the sections that follow, I review the roles and responsibilities of boards, factors that increase board effectiveness, and the evolution of governance.
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