Commercial and Nonprofit Boards of Directors

While nonprofit and for-profit organizations have differences, both require a group of people to oversee the operation to make it successful. The board of directors is typically comprised of people with different skills and connections. However, to be successful the board of directors of a non-profit organization must look for people who have a passion for the mission and commitment to see the organization grow towards its goals. Furthermore, the board should encourage new members to participate on committees, which can assist them in becoming familiar with governance issues as well as other important topics.

In general, both commercial and non-profit boards or directors are governed by the rules of the government, articles of incorporation and the board constitution and bylaws. These documents establish how the board will be formed, including the number of directors with voting rights and the manner in which the board is to inform members of its meetings and the minimum number of votes required for an quorum. Both types of boards also have written policies on conflicts of interest and director independence. They also contain the confidentiality and indemnification.

The board typically has one or several officers (Presidents Vice Presidents, Presidents, Treasurers and Secretaries). These positions and their specific terms are typically defined in the company’s bylaws. While the President can be the Executive Director or CEO, it is important to be aware that the two positions are not the same and to keep the President’s role concentrated on oversight of the board and governance, while the CEO/ED’s responsibilities are focused on management.

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