Do you know that all nonprofit board members have three legal responsibilities to the organization they serve? Let's break them down.
1) Duty of Care
The the duty of care describes the level of competence that is expected of a board member. This means that a board member needs to exercise reasonable care when she makes a decision as a steward of the organization.
2) Duty of Loyalty
This is a standard of faithfulness. A board member must give undivided allegiance when making decisions affecting the organization. She can never use information obtained as a board member for personal gain. instead, she must act in the best interests of the organization.
3) Duty of Obedience
This requires a board member to be faithful to the organization's mission. She is not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission.
Implied: Duty of Transparency
Board members must document and exercise due diligence. This is reflected in your meeting minutes, which should be available to anyone who asks for them. By making governance information publicly available, you encourage transparency and accountability.
Need help applying this to your own board service? Call today.
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