Boards of directors, commercial or nonprofit is the legal governing bodies of different business entities. They can be listed on a stock exchange that is a public exchange (a public company) or privately owned and not taxed (a private or family limited partnership or a company) or exempted of federal income tax because of their charitable mission (a nonprofit corporation).
Whatever the form of business entity, boards are generally required to perform their fiduciary obligations, such as ensuring that decisions are based on facts and the best interests of the company. Boards should also be aware of the legal implications and make sure they adhere to all requirements of their bylaws. This is especially true for fundraising, conflicts and other policies.
Be aware that the majority of board members are volunteers and not paid. This is why board members should remain involved and enthusiastic about the work the board is doing for the community.
One way to keep a non-profit board of directors engaged is to give them a non-legally binding contract that clearly defines the primary roles, responsibilities and expectations. This will cut down on the amount of back and forth and meetings required to report.
Another way to improve the performance of the board of a non-profit organization is to increase diversity. Having a mix of people with diverse backgrounds and perspectives will help to avoid groupthink and myopia. This is why it is crucial to find diverse candidates from various sources, including people who are directly affected by the social issue that your charity addresses. Other factors to consider include ethnicity, age, occupations as well as work habits, political ideology, and location.
