Nonprofit Boards and Responsibility

Reading about the current (and ongoing) woes at the Texas Discovery Gardens, I’m reminded of a similar situation years ago at the Providence Athenaeum, now nearly 200 years old, where the board of trustees stood by while the endowment–a restricted fund–was spent on mounting operating expenses. The public damage was significant and it took them years to recover. I had to write about that, too.

Serving on a nonprofit board is a public responsibility, not a sinecure. Board members have very specific fiduciary duties of care, loyalty and obedience. In a nutshell, they are required to follow bylaws and procedures, support the decisions of the board, and ensure that they as individuals have all the information they need to provide good governance to the organization.

What board members are not supposed to do, assuming there is a staff, is manage. Outside of group decision making and when acting as individuals, board members work for the executive director, not the other way around.

What they are supposed to do is act as ambassadors for the organization, ensure that there are adequate financial and human resources to carry out the mission, and make sure that the organization is operating within both legal requirements and good management practice.

The public trust is best served if nonprofit boards understand and accept their legal and ethical responsibilities, and stand accountable to one another and to their constituents.