• Legal Duties
• Meeting minutes
• Advisory boards
• Executive transitions
• Staff Recommended resources

Legal duties

The board acts as trustee of the organization's assets and ensures that the nonprofit is well managed and remains fiscally sound. In doing so, the board must exercise proper oversight of the organization's operations and maintain the legal and ethical accountability of its staff and volunteers.

The main legal responsibilities of a nonprofit board are often summarized in the "three Ds":

• Duty of care: Board members are expected to actively participate in organizational planning and decision-making and to make sound and informed judgments.
• Duty of loyalty: When acting on behalf of the organization, board members must put the interests of the nonprofit before any personal or professional concerns and avoid potential conflicts of interest.
• Duty of obedience: Board members must ensure that the organization complies with all applicable federal, state, and local laws and regulations, and that it remains committed to its established mission.

In addition to its legal responsibilities, the board acts in a fiduciary role by maintaining oversight of the nonprofit's finances. Board members must evaluate financial policies, approve annual budgets, and review periodic financial reports to ensure that the organization has the necessary resources to carry out its mission and remains accountable to its donors and the general public. The board must also ensure compliance with federal and state regulations.

To learn more about developing a board for a newer organization, please see our free recorded webinars or tutorials:

• Legal Essentials of Establishing a Nonprofit Organization
• Board and Governance Issues for Startup Organizations
• Before You Seek a Grant: A Checklist for New Nonprofits

Meeting Minutes

Meeting minutes are legal records, so it's important to get them right.

In essence, the minutes describe when your nonprofit's meeting was, where it was, who was there, any actions members took and what's ahead. Effective minutes help board members focus and keep track of their work.

Form 990 also asks whether nonprofits "contemporaneously document" board actions. Answering "no" suggests poor management and might make your organization subject to an IRS audit.

Staff-recommended resources at the bottom of this page include templates for keeping minutes for your nonprofit's meetings.

For an in-depth guide, see Anthony Mancuso's Nonprofit Meetings, Minutes & Records: How to Properly Document Your Nonprofit's Actions. Also, chapter 15 of The Handbook of Nonprofit Governance by BoardSource has information about board minutes.

Advisory boards

Advisory boards or committees are volunteer groups formed to give advice and support to a nonprofit's governing board or executive staff.

Unlike a governing board, an advisory board does not have any formal legal responsibilities or decision-making authority. Nonetheless, advisory boards can be helpful for purposes of fundraising, gathering advice on specific programs, or providing leadership opportunities for key individuals who may not have the capacity to serve on an organization's governing board.

To learn more about advisory boards, check out the staff-recommended resources list at the bottom of this page.

Executive transitions

One of the most important responsibilities for nonprofit boards is selecting the organization's next executive director. The search and transition can be complex, and both generally require careful planning, well before a planned - or unplanned - departure occurs.

This process, also known as succession planning, includes developing your staff's knowledge, skills, and abilities, and preparing for the many changes that come with a change in leadership. Some things to consider, for example:

• What does the board need to do during the first five days after the initial announcement?
• Will you need a temporary chief executive?
• Have you developed a transition timeline?
• What do you need to include in the new chief executive's orientation packet?

The Annie E. Casey Foundation argues that nonprofits should have a succession plan because it: Ensures the organization's viability in the event of a key manager's unplanned absence

• Makes the organization more nimble and flexible by developing a deep talent pool
• Makes the executive's job more "doable" because leadership is shared
• Energizes and reassures the board by providing opportunities to develop high-level strategies for the future
• Strengthens the local nonprofit network as staff develop their skills and ambitions

See also our related Knowledge Base articles:

• What is the board's role in fundraising?
• How can I find board members for my nonprofit?
• Can the executive director also serve on our organization's board of directors?

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