Administration
Frequently Asked Questions about Administration
The board of directors serves the organization; it does not own it. The organization is really owned by those who have a stake in its operation: employees, members, donors, beneficiaries, and so on. Directors serve as proxies for the true owners. Thus, the board is truly a collection of stewards in whom the rights and duties of ownership have been vested and the authority to make strategic decisions has been given.
The risk to the organization in a termination situation is a claim from an employee that discrimination played a role in determining who was to be laid off. The first precaution an organization should take is to consider alternatives to layoffs. Discussion of the alternatives should be carefully documented. The analysis should be outlined in a memorandum to the board, complete with reasons why the alternatives to layoffs are unsatisfactory and the rationale that was applied when selecting the employees to be laid off. The decision to cut a position must be supported by a legitimate operational reason.
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.