GOVERNING BOARD

Nonprofits are governed by an elected, volunteer board of directors that should consist of individuals who are committed to the mission of the organization. An effective nonprofit board should determine the mission of the organization, establish management policies and procedures, assure that adequate human resources (volunteer or paid staff) and financial resources (earned income, government contracts and grants, and charitable contributions) are available, and actively monitor the organization's management, financial and programmatic performance.

A. Board Responsibilities

(1) The board should engage in long-term and short-term planning activities as necessary to determine the mission of the organization, to define specific goals and objectives related to the mission, and to evaluate the success of the organization's programs toward achieving the mission.

(2) The board should establish policies for the effective management of the organization, including financial and, where applicable, personnel policies.

(3) The board annually should approve the organization's budget and periodically should assess the organization's financial performance in relation to the budget. As part of the annual budget process, the board should review the percentages of the organization's resources spent on program, administration, and fundraising. The full board should also approve the findings of the organization's annual audit and management letter and plan to implement the recommendations of the management letter.

(4) The full board or some designated committee of the board should hire the executive director, set the executive's compensation, and evaluate the director's performance at least annually. In cases where a designated committee performs this responsibility, details should be reported to the full board.

(5) The board should periodically review the appropriateness of the overall compensation structure of the organization.

B. Board Composition

(1) The board should be composed of individuals who are personally committed to the mission of the organization and possess the specific skills needed to accomplish the mission.

(2) Where an employee of the organization is a voting member of the board, the circumstances must insure that the employee will not be in a position to exercise undue influence.

(3) The board should have no fewer than five (5) unrelated directors. Seven (7) or more directors are preferable.

(4) The organization's bylaws should set forth term limits for the service of board members.

(5) Board membership should reflect the diversity of the communities served by the organization.

(6) Board members should serve without compensation for their service as board members. Board members may be reimbursed only for expenses directly related to carrying out their board service.

C. Conduct of the Board

(1) The board is responsible for its own operations, including the education, training and development of board members, periodic evaluation of its own performance (i.e., at least every two years), and where appropriate, the selection of new board members.

(2) The board should establish stated expectations for board members, including expectations for participation in fundraising activities, committee service, and program activities.

(3) The board should meet as frequently as is needed to fully and adequately conduct the business of the organization. At a minimum, the board should meet four (4) times a year.

(4) The organization should have written policies that address attendance and participation of board members at board meetings, and include a process to address noncompliance.

(5) Written meeting minutes reflecting the actions of the board, including reports of board committees when acting in the place of the board, should be maintained and distributed to board and committee members.