The members of the board of directors of nonprofit organizations must be able to carry out various duties. The most important duties are to set governance and management guidelines that support the sustainability of a non-profit and provide financial oversight. They also develop strategic plans and supervise the implementation of these plans. In certain situations, they can be held personally accountable for nonprofit obligations. For instance when they fail to pay withholding tax on wages of employees.
In many instances, the board will hire an employee to manage the company. The executive director, or CEO, is responsible for recruiting, training and supervising the board and staff. They may also be involved in fundraising activities. The job of the executive director can be a major obstacle for a newly founded nonprofit and it’s better to have a seasoned board member coach the new ED/CEO, so they will know how to collaborate with the board to make it work.
Board members should also ensure that the organization has sufficient funds to implement its programs. This could be through personal donations or fundraising events, as well as other philanthropic initiatives. The Board should be aware of how nonprofits report their financial statements and ensure that a transparent system is in place to prevent embezzlement or fraud. They should also be able to develop and approve an annual budget, and must be able to track how closely the actual expenditures are in line with the budget.
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