Whether your organization is a commercial (for-profit) or an S or C corporation or partnership, LLC, or a non-profit, it needs clear direction and supervision. This is usually provided by a trustee or board of directors.
Boards of for-profit as well as non-profit organizations share many of the exact same responsibilities. They are responsible for selecting and evaluating the CEO, preparing operating plans, allocating and safeguarding financial resources, assuring policies are in compliance with ethical and legal requirements, and advancing the organization’s mission. Nonprofits are also accountable for getting tax-exempt status and meeting all legal requirements.
A well-functioning board requires the participation of committed individuals with different abilities, knowledge and connections to help ensure a secure financial future. Non-profit and for-profit boards must actively recruit and reach out to potential members who are qualified, instead of waiting for potential members to approach them, create a streamlined process of screening interviewing, deciding and making decisions, and consider candidate diversity (gender and socio-economic background race, religion, nationality) as a crucial factor.
Boards of non-profit and for-profit organizations typically have standing committees to help them with their diverse management and governance obligations like audit and compensation (or human resources) and governance & nominating, and executive. Other committees can be specific to the particular industry or type of business for example, such as science and technology, collections and visitor engagement, quality and regulatory or public affairs and social responsibility. It is a standard practice for board members to disclose any potential conflicts of interests and disqualify themselves from voting and deliberating on issues that are within their sphere of influence or of concern.