The role of the board

Not-for-profit board members are appointed or elected to help steer their community group towards its mission. They must work individually and collectively in that task.

In most not-for-profit organisations, the question of who the board members are will be relatively clear-cut. However, legally speaking the question of whether or not one is a board member is not altogether simple. It’s important that you understand who the law views as a board member so that you can understand the role they play at your organisation.

You do not usually have to have any specific qualifications to be a board member. However, the best boards are those that have a good mix of a large range of skills. For this reason, many boards will be on the look-out for people with certain capabilities; they may be looking for someone with financial skills, for example, or fundraising skills, or good community connections, or someone who is media savvy.

All board members, regardless of qualifications, need to be "eligible" in the eyes of the law to hold that position.

Board members must be:

• An adult (over 18 years of age);
• Not insolvent or under administration; and,
• Not disqualified under the group's constitution or due to a breach of their duties.

Board members are charged with working collectively to act as the "mind" of the community group they serve. In doing so, they must work together to:

• Determine the group's mission and purpose;
• Set a strategic vision and plan;
• Ensure the group is financially and legally accountable;
• Appoint and monitor the group's CEO (if it has one);
• Ensure the group has adequate resources;
• Work to enhance the group's public image; and
• Assess the board's effectiveness.

In practice, this may involve, among a plethora of other tasks, and is dependent on the type of group and the type of board they are serving on.

Because all not-for-profit organisations serve different community needs, their boards and the types of responsibilities they undertake can vary enormously. Essentially, though, there are certain basic tasks most boards need to undertake if they wish to be successful.

These can be categorised under the following headings:

• Legal and financial accountability
• Strategic vision and objectives
• Fundraising
• Advocacy
• Self-evaluation
• Meetings

Many people approach their role on not-for-profit board more casually than they would a position on a commercial board. They shouldn't. Legally, and certainly ethically, they are subject to the same expectations and responsibilities.

Your legal responsibilities include:

• Duty to act in good faith and with care and diligence
• Duty to act in the best interests of the organisation as a whole
• Duty not to misuse information or misuse your position
• Duty not to abuse a corporate opportunity
• Duty to avoid/disclose any relevant potential conflict of interest
• Duty to maintain confidentiality
• Duty to observe the constitution
• Duty not to trade while insolvent
• Duty to avoid negligence, fraud and other wrongs

There are also other relevant laws to be mindful of.

Committees concentrate on and develop expertise in specific areas, ensuring that the full board can concentrate more on the "big picture". Usually their role will involve examining and debating an issue and then preparing a recommendation for the full board. They may also be set up to take on a major project or task – finding a new CEO, for example.

In some organisations, committees comprise only of board members. Others involve outside people, often those with particular industry or technical knowledge of a particular area.

Not all boards have committees and not all boards have the same committees. However, there are some common ones:

• The Executive Committee
• The Governance Committee
• The Budget and Finance Committee
• Fundraising/Development Committee
• The Remuneration/People Development Committee
• Product/Program Development Committee
• Marketing and Public Relations Committee
• Ad Hoc Committees

The board of a not-for-profit agency is the highest authority in the organisation. In the last analysis, what the board says goes. If the staff can't agree to implement board policy, it's the staff that has to resign.

The board has to provide purpose, leadership and overall strategy, and it has the responsibility of assuring the public that the organisation's finances are sound, its operations are legal, and its procedures work.

On the other hand, it's generally the staff that has a deep understanding of the day-to-day working of the organisation. They are closest to the needs and opinions of the clients and supporters, they know what kinds of fundraising initiatives have worked before, they feel the heat when there are staffing pressures and they are on the front line when the photocopier is too old to carry on for another day.

What the board does is known as governance; what the staff does is management. The functions are separate and different but they should operate as a partnership. If there is any confusion in an organisation about roles and responsibilities, it can lead very quickly to conflict, inefficiency, low morale and irritation. This happens surprisingly often.

It is important that the board clarify the roles and responsibilities of the board, those of the staff, and those that are joint. The board should also be mindful of the their relationship with the CEO at all times.

A successful relationship between board members and staff comes from:

1. Suitable processes and procedures
2. Clearly defined management roles
3. Defined boundaries
4. Clear limits to the authority of the staff
5. A CEO whose performance is adequately monitored by the board.

Some friction is normal. It is paramount you have a plan in place for when things go wrong between the board and staff so that any issues are smoothed as quickly as possible and the organisation can continue to function effectively.

The number one duty of any board member is to act in the interests of the organisation he/she is overseeing. This means that you must not allow your personal interests, or those of anyone else, to override the interests of your organisation - even if you've joined the board as the representative of another group, or another organisation, or another board.

This is called fiduciary duty and should be remembered as the key role and responsibility of any board member.

Board solidarity means that a decision taken in proper form by the board is a decision of all board members. You don't get to behave as if it hadn't happened, or criticise it to outsiders, or keep agitating outside the board for your own proposition.

This can often be difficult, because boards can take decisions that you may not want to be associated with, or decisions that go against the opinions, or even the interests, of other groups - some of which groups can be among those electing members to the board. Even there, though, you're not supposed to go back to your constituents and badmouth the board's decision. As best you can, you're supposed to defend it, showing your people why it was taken and what it actually means.

Board solidarity is not merely a ‘nice-to-have’. It is a fundamental part of governance, and one of the key responsibilities of all board members. An incorporated association is in the eyes of the law a legal person - but only one legal person, which means that it can only have one opinion at a time.

If you can't defend the actions of your board at all - if you think they're utterly wrong - and if there's no chance of winning your colleagues round, then you may have to consider resigning.

In simple terms, a community group board is governing for the benefit of, and is therefore accountable to, the group itself. However, the reality is a little more complicated. Firstly, who is "the group"? Its founders? Its current members? The people it has been set up to help/educate/entertain/? The answer is all of these – and more.

You should consider yourself accountable to:

• The group
• The "consumers"
• The members
• Funders
• Sponsors and partners
• Staff
• The community.

Not all stakeholders are considered equal, and it may be difficult for board members to ascertain exactly who they are governing for – and what weight to give to those competing interests.

ICDA's tip? At the start of your board term, and several times during your term, make a list of your community group's stakeholders, including its "customers" (all those people or groups who use or benefit from your services), members, funders, sponsors and partners, staff, the community, and any other people who may have a stake in your group's activities, including those who may be adversely affected by them. You might also consider "ranking" them from most important to least important – with "the group" as a whole on the top of the list. This will help you to be clear in your own mind exactly who you are governing for, and what consideration you should give those competing interests in making decisions affecting the group. Don't forget to take into account your legal and financial responsibilities.

If you’re struggling with being an accountable, transparent and consultive board, there are a number of steps you can take to rectify the situation.

When you join a board you accept the obligation to look after your organisation's finances. In some cases, a board's financial responsibilities may be quite extensive (for example, for a board that is responsible for overseeing a large organisation with debts, income, staff, etc.).

In other cases (say, for a small community group board that does not perform many or any financial transactions) these responsibilities might be simple or non-existent.

Any board that oversees a budget, no matter how small, needs to have a good understanding of its financial duties and take them very seriously.

Board members should consider their financial competence and get their head around the what the key financial documents are. Help is available for those struggling with their financial competence.

Getting your organisation's message out into the community is an essential step in reaching the widest possible number of people whom you can serve or help, or who can serve or help you. It is therefore an important responsibility of the board in helping the organisation to achieve its goals.

The board of director positions will depend on the size and makeup of your board, but generally they are:

• Chair
• Secretary (sometimes called company secretary).
• Treasurer
• General board member.