What Are the Responsibilities of a Board of Directors?

Boards may differ in size and composition, however they must all have a clear set of responsibilities for the board to ensure that board members are accountable. The most common responsibilities of boards are strategic leadership, ensuring financial stability, acting as ambassadors and ensuring healthy governance.

Based on the type of organization, boards may have additional responsibilities, such as community partnerships or fundraising. However, the main focus of a board is governing and overseeing the non-profit’s activities. The vast majority of nonprofit boards are volunteers that do not receive payment for their work.

The board is not accountable for running the day-today business however, it can make crucial strategic decisions, such as mergers and acquisitions or other high-level financial decisions. It also makes sure the business is operating legally and in the best interests of shareholders and other stakeholders.

In addition to legal obligations, a board should have a robust conflict of interests policy and an understanding of documents that organize the organization (like bylaws, articles and applications for exemption).

Finally, a good board will communicate with stakeholders to learn about their concerns, seek out necessary changes in corporate behavior, and help build the company’s reputation in the community. In the end, the actions of the board define its ethical standards. They are more important than written ethical guidelines and reveal what the organization truly believes. This is more crucial than ever in light of recent controversy regarding corruption and bribery.

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