Page 45 - Washington Nonprofit Handbook 2018 Edition

practices will preserve the corporate entity and enable it to work more effectively to
accomplish your organization’s mission.

CHAPTER 12. Function and Authority of the Board of Directors

Operating a nonprofit organization is a complex undertaking that involves
multiple stakeholders, including board members, the executive director and other
staff, volunteers, persons being served, and funders. The board of directors is
responsible for setting overall priorities and ensuring that resources are used
wisely in pursuit of the organization’s mission.

Under the Act, a nonprofit corporation’s board of directors is the governing
body of the corporation and is responsible for managing the affairs of the
corporation. The board may delegate certain of its responsibilities to committees
and officers of the corporation, but the board retains ultimate responsibility for the
corporation. A corporation exercises its powers through resolutions and acts of the
board. Generally, the board delegates the day-to-day responsibilities of operating
the corporation to paid or volunteer staff members.

a. Election, Number of Directors, and Board Terms

Under the Act, a corporation’s board of directors must be composed of at
least one individual. The articles of incorporation (“articles”) or bylaws establish the
number of and election method of the directors. The number of directors may be a
range (e.g., “not less than seven or more than 15”) and may be increased or
decreased by amending the document that specifies the number. An amendment
that decreases the number of directors cannot shorten the term of any current

director. The articles or bylaws may provide that directors will be elected by the
corporation’s members or by the corporation’s directors; in some circumstances,
directors may be appointed.

The articles or bylaws specify the directors’ terms of office. Terms can be for
one year or several years. Nonprofit corporations typically choose terms of two or
three years for their directors. Each director holds office until his or her successor
has been selected and qualified. The term of the directors may be staggered by
providing that only some portion of the board seats are up for election at the same
time. Staggering the directors’ terms can provide valuable continuity on the board.

If the corporation has a membership with voting rights, the articles or bylaws
may require that directors be elected by a majority vote of the corporation’s
members. Alternatively, the articles or bylaws may provide for a more complex

WASHINGTON NONPROFIT HANDBOOK -34- 2018