Commercial and Nonprofit Boards Or Directors Leave a comment

Most nonprofits and businesses have boards or directors, the governing bodies that make plans for organizations, assign recognition to employees and oversee the executive staff. Many non-profits have advisory boards that provide advice and guidance to the executive director or board.

Nonprofit and commercial boards share certain similarities in the path to success. Healthy boards require careful recruitment, orientation and training for new members; attention to building a strong partnership between staff and the board; and respect for the time and dedication required by volunteer board members.

The primary function of both kinds of boards is setting strategic goals and ensuring that management’s actions are aligned with these goals. Both types of boards need to ensure that there are operating plans, that financial resources and allocations are made in a manner that meets the long-term and near-term goals of the organization, and policies encourage the adherence to ethical and legal standards.

Nonprofit boards tend to be larger than those of for-profit organizations, since they are required to represent all constituents that have a stake in the institution’s activities. This often results in the boards of independent colleges for instance with 70 or more members including parents, teachers staff, alumni, and students are members, as well as wealthy individuals.

Both for-profit and non-profit boards typically meet several times per year to discuss operations and make crucial decisions. Both types of boards have their own governing documents, which comprise articles of incorporation and bylaws, along with descriptions of the responsibilities and roles of committees, directors, and the board. The two types of boards formulate policies in writing that include those regarding director autonomy, conflicts of interest code of conduct, and indemnification.

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