Governance
The board of directors is the cornerstone of a nonprofit’s success. Here are links to information on selection of board members, drafting bylaws, running board committees, board retreats, and other important board issues.
V. Board of Directors
A. Principle - Board Responsibilities
Each charitable nonprofit must have a board. Except as otherwise provided (by law and the government document), all corporate powers shall be exercised by or under the authority of, and the affairs of the charitable nonprofit managed under the direction of its board. (See Iowa Code section 504.801 for nonprofit corporations, Iowa Code section 633.A4101 et seq. for trusts). The board should be active.
Practices
- A board of directors’ primary responsibilities are to determine the organization’s mission and its policies, to set the organization’s overall program for the year and engage in long range planning, establish the fiscal policy, provide adqeuate resources for the activities of the organization; select, evaluate and if necessary, terminate the appointment of the chief executive, and develop and maintain communication links to its constituencies and the community.
- The board should avoid involvement in day-to-day operations of the charitable nonprofit, although it is recognized that for smaller nonprofits, with no paid staff, this is not possible.
- The board sets organizational policies and monitors compliance with them. In making policies for a charitable nonprofit, a board is setting objectives against which to measure the organization. Setting and monitoring policy protect directors from liability where they act in good faith and with due care.
The Governing Board for Iowa Charitable Nonprofits by Willard Boyd.
Doing Good Better by Edgar Stoesz.
Frequently Asked Questions about Governance
The Iowa Principles and Practices for Charitable Nonprofit Excellence provides this list of skills and talents to consider in finding board members:
a. Operational area—includes management, finance, investment, law, accounting, public relations, fund raising. Together board members should have a range of operational competencies needed to carry out the duties of the board.
b. Program understanding—knowledge of and informed insight on the organization’s programs.
c. Connection to constituencies—should include representation from groups the organization directly serves. Widespread support requires a diverse board.
d. Advocacy leadership—access to resources and influence with constituencies important to the charitable nonprofit organization.
e. Inclusiveness—age, sex, ethnicity, religion, sexual orientation, socio-economic background, and geographic location of prospective board members.
f. Commitment—give time and funds and participate in fundraising.
g. Supportive—support mission, vision, and values. " (V. B. 4) When nonprofit corporation boards do not have the skills necessary to deal with a particular issue, reasonable reliance on outside experts such as accountants and lawyers is allowed without breach of fiduciary duty. Iowa Code § 504.831(5) For trustees, the Iowa trust code provides, “A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee's representation that the trustee has special skills or expertise, has a duty to use those special skills or expertise.” Iowa Code § 633.4205.