Page 17 - C&A's Nonprofit Board Guide

BOARD & EXECUTIVE DIRECTOR
ROLES

FISCAL OVERSIGHT
THERE IS ALWAYS A QUESTION AS TO WHERE A BOARD’S RESPONSIBILITIES ENDS AND SPECIFICALLY, THE BOARD OF DIRECTORS HAS
MANAGEMENT’S STARTS. THERE ARE NO HARD AND SET RULES; WHAT WORKS FOR ONE OVERSIGHT OVER THE FOLLOWING AREAS: The Board provides proper fiscal oversight,
including setting and approving an annual budget.
AGENCY MAY NOT BE EFFECTIVE FOR ANOTHER. SOME ORGANIZATIONS HAVE A STRONG
EXECUTIVE DIRECTOR AND A WEAK BOARD, WHILE OTHERS HAVE A STRONG BOARD AND A LEGAL OVERSIGHT This does not mean the Board prepares the budget,
WEAKER EXECUTIVE DIRECTOR. ONE THING IS FOR SURE, RUNNING AN EFFECTIVE NONPROFIT nor does it mean that the Board should micro-
TAKES AN ACTIVE BOARD OF DIRECTORS AND A DEDICATED STAFF LED BY A STRONG The Board ensures that it is operating in manage the budget process. The Board should
EXECUTIVE DIRECTOR WORKING IN HARMONY TO MOVE THE MISSION OF THE ORGANIZATION accordance with its mission and the purpose review and gain an appropriate understanding
of the budget, ensure that the organization is
FORWARD. for which it was granted tax-exempt status. establishing appropriate reserves, revenues and
Board members should constantly re-read the expenses make sense and are supportable, and
organization’s mission statement to ensure that monitor the organization’s fiscal health and actual
everything they do on behalf of the organization operations compared to budget on a regular basis.
ROLES OF THE BOARD OF DIRECTORS is in furtherance of the organization’s mission. Board members need to have at least a basic
understanding of how the organization generates
As safeguards of the public trust, Board members
are responsible for protecting the organization’s revenue and its cost structure to be able to
understand if the proposed budget is reasonable.
assets; ensuring that the organization’s control The fiscal aspects of an organization are not always
environment is effective; prudently deploying the easiest for Board members to understand, but
resources; and providing direction and they are the lifeblood of any organization.
governance.
Part of the role of the Board is to ensure that the
The Board ensures legal and ethical integrity and organization has the financial resources it needs.
maintains accountability. As a result, Board members should be involved in
helping in the organization’s fundraising efforts.
MANAGEMENT OVERSIGHT Fundraising is often essential to an organization
to provide discretionary funding. Many Boards
The Board is responsible for ensuring that the require a give-or-get commitment from its Board
nonprofit organization is operating effectively. members. This is something you should understand
It is the Board’s responsibility to select the before joining a Board.
Executive Director and outline his/her role;
the Board supports the Executive Director PROGRAM OVERSIGHT
and assesses his/her performance (should be
performed in a written evaluation); the Board It is the Board’s responsibility to ensure that
determines appropriate compensation for the programs are in place to further the mission and
Executive Director and other executive staff goals of the organization. If there are specific
members; and the Board has the power to hire compliance programs that the organization must
and remove the Executive Director. follow (e.g. Medicaid), the Board should ensure a
proper compliance program is in place and should
be receiving regular updates of the organization’s
I n general terms, the Board of Directors provides oversight and guidance to the Executive compliance.
Director and the nonprofit’s other staff members. The Board ensures that the organization
stays aligned with its mission and values in addition to complying with all federal and state
laws. In essence, the Board establishes guard rails to help the organization’s management stay on
the road.

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