In this video, Tami Benus, CPA discusses the Duties of the Board of a Not-For-Profit (Nonprofit)
The Duty of Individual Board Members
Each board member has a fiduciary duty in overseeing the organization’s activities. This duty encompasses three key responsibilities: the duty of care, the duty of loyalty, and the duty of obedience.
- The Duty of Care:
A board member must act in good faith, in a manner they reasonably believe to be in the best interest of the organization, and with the level of diligence, care, and skill that an ordinarily prudent person would exercise in a similar position under comparable circumstances. - The Duty of Loyalty:
A board member must act in the best interests of the organization, rather than in their own interests or the interests of their associates. - The Duty of Obedience:
A board member must comply with applicable laws and adhere to the organization’s governing and policy documents.
Conflict of Interest
Nonprofit organizations should have a comprehensive conflict-of-interest policy to address potential conflicts. Such policies typically require procedures similar to the following:
- A conflicted board member must recuse themselves from discussions and decisions regarding the matter (except for preliminary discussions necessary to help other board members understand the relevant facts).
