Page 54 - Washington Nonprofit Handbook 2018 Edition

d. Models of Governance

In an effort to clarify the roles and responsibilities of nonprofit boards,

several organizations and academic researchers have developed “models of
governance” for nonprofit corporations. Most of these models go beyond simply
restating the legal duties of boards and directors, aiming to set forth critical
functions and processes of nonprofit boards.

One widely used model is The CompassPoint Board Model for Governance
and Support (CompassPoint, 2003, http://www.compasspoint.org). As the name
implies, the CompassPoint Model suggests that boards and directors fulfill two
roles: governance and support. The objective of governance functions is to
represent the community’s interest within the organization, asking, “Is our
organization using public and private resources to benefit the community?” The
objective of support functions is to represent the organization’s interest in the
community, posing the question, “How can I, as a member of the board, best

represent the organization in the community?”

The entire board acts as a unit when fulfilling governance functions. Board
members generally act individually or through committees when fulfilling support
functions.

Governance responsibilities include the following:

y Direction—determine mission/purpose and vision

y Legal Affairs—ensure compliance with laws and regulations and
fulfillment of contractual obligations; manage risk; obtain adequate
insurance coverage

y Finances—approve annual budget; review financial statements;
safeguard assets from waste and misuse; review audit (if applicable);

manage investments (if applicable)

y Human Resources—hire/fire, support, evaluate, and set compensation
for the executive director; ensure that the organization has
appropriate personnel policies

y Fundraising—approve fundraising strategy and monitor progress

y Planning—determine overall priorities/objectives (and related
strategies)

WASHINGTON NONPROFIT HANDBOOK -43- 2018