Commercial and Nonprofit Boards Or Directors

The majority of nonprofits and businesses have boards or directors, the governing bodies that create plans for their organizations, give recognition to those who perform those packages and oversee the executive staff. Many nonprofits also have advisory boards that provide guidance or advice to the board and executive director.

Nonprofit and commercial boards share certain similarities in the path to success. Healthy boards require the careful recruitment, training and orientation of new members. They also require a collaboration between board members and staff.

The primary function for both types of boards is setting strategic goals and making sure that management’s actions are aligned with these goals. Both types of boards need to ensure that operating plans are in place; that financial resources are safeguarded and distributed in ways that will achieve long-term and near-term goals of the organization; and policies encourage legal and ethical compliance.

Nonprofit boards are typically larger than for-profit corporations, because they must represent all constituencies that have a stake in the institution’s activities. This can lead to college boards, for example having at least 70 members as parents, teachers staff, alumni and faculty are on the board along with wealthy individuals.

Boards of both types typically meet several times a year to discuss their operations and take important decisions. Both types of boards have governing documents my latest blog post which include articles of incorporation and bylaws, as well as descriptions of the roles and responsibilities of committees, directors and the board. The two types of boards develop policies in writing that include those regarding director autonomy, conflicts of interests, codes of conduct and indemnification.