Board of Directors have a legal responsibility to the nonprofit of the board on which they serve, as we discussed earlier, and they also have other management duties. Management duties will vary according to the needs of each organization, but one management duty that all boards should be doing is overseeing the organization’s Executive Director/CEO. It is the responsibility of the board in their management capacity to hire, set the compensation of, evaluate and if necessary, remove the Executive Director. It is because this is a consistent, primary responsibility of the board that it is important that the Executive Director is not a voting member of the board and the Executive Director’s relatives do not sit on the board. These situations cause consistent Duty to Loyalty issues and questionable adhesion to legal responsibilities, conflicts of interest, lead to biased decision-making and detracts from the board’s ability to properly oversee and evaluate the Executive Director.
Evaluating the Executive Director is an important component of the management duties the board of directors have. As the Executive Director sets the financial health and organizational progress for the nonprofit it is imperative the board evaluates the Executive Director’s effectiveness on a regular basis. The board should have an Executive Director evaluation committee that provides a self-evaluation to the Executive Director, creates and gathers evaluations from the staff on the Executive Director, and presents recommendations and findings based on the information gathered to the entire board. Based on the recommendations of the committee and information gathered, the board can make human resource decisions based on the strengths, weaknesses and areas in need of improvement exhibited by the Executive Director, including a salary increase.
Evaluating the effectiveness of the Executive Director can provide a Board with valuable insight into organizational programming. As part of their management duties, the Board must also determine whether or not programs are impactful and inline with the organization’s mission. Nonprofits and their board of directors most effectively produce programming that has meaningful impact when the board provides strategic oversight ensuring programs align with the mission. Strategic oversight strengthens programming, helps increase organizational accomplishments and improves the organization’s public standing.
Being well-known in the community can help attract and recruit new boards members, which is also a management duty handled by the board. As board member recruitment ensures future sustainability, boards should create and use a board matrix to aid in the board composition. Prospective board members should have competencies needed by the board and organization as well as reflect the demographic of the geographical and nonprofit population served by the nonprofit.
Serving as a Board member for a nonprofit is a comprehensive job with important legal and management duties accompanying the position. Board members need to be aware of the tasks required for them, properly trained and oriented so Board members can successfully complete their duties.
Successful board members who are acting a fiduciaries and managers will strengthen the organization they serve and best position it for future success.
This is the final installment of "The Board Series". Did anything surprise you? Reassure you? Let me know in the comments down below!