In my view they are both correct. And when it comes to creating and maintaining a nonprofit organization, a team and many "I's" make up the leadership. That will include the team that creates and incorporates the organization and the teams that will form the boards in the future. In many ways the board is the "owner" of the organization. In nonprofit organizations with a strong membership that elects the board, the membership may be the "owner" In another sense the owner is the public and the community served.
A nonprofit organization is not a sole proprietorship. It is not YOUR organization. If you are looking for your mission and vision to be born and survive and thrive it will require a team of "I's". The"I's" will share your sense of mission and vision. The team of "I's" will help develop that mission and vision with values, knowledge, talent, experience, passion, advocacy, ignorance, communication, silence, agreement and disagreement, leadership and followship.
The board members have legal obligations. We will flesh them out as we go along but for now, let's focus on just three. The nonprofit board, itself, is charged with carrying out the oversight responsibility, to act as a fiduciary. A board's performance is judged by three key legal precepts:
1. Duty of Care: To exercise reasonable care when making a decision as a steward of the organization. A trustee must be well informed; know and understand the organization's mission, programs, and structure, attend meetings and come prepared to meetings.
2. Duty of Loyalty: To act in the best interests of the organization and never use or be perceived to use information obtained as a member for personal gain or a competitive edge for another group.
3. Duty of Obedience: To uphold the organization's mission and actively work to ensure that the organization operates consistently within its mission, the by-laws and state and federal law.
Here is one way to translate those legal duties:
The good faith responsibilities of board members checklist.
- Attend all board and committee meetings. If unable to attend, be able to show a valid reason for the absence. If attendance becomes impossible resign from the board.
- Select leadership who will lead, maintain order, allow the flow of information at meetings and keep the board informed of any problems including those that might have litigation potential against the organization.
- Assure that board members fairly represent the community, its diversity and language.
- Have a thorough knowledge of the duties of a board member and provisions of the charter and bylaws.
- Be prepared at meetings by reading the material sent in advance. Leadership and staff have a responsibility to send material in advance, not wait until the meeting to present a significant amount of data and information for decision making
- Pay attention to corporate affairs; be informed about the general activities and operation of the organization.
- Encourage that organizational activities remain consistent with the mission of the organization.
- Express yourself at board and committee meetings meaningfully, directly, honestly and accurately on the issues presented or new ideas.
- Review and approve the annual written budget of the organization and any amendments during the year.
- Advocate for a small but reasonable portion of the budget be reserved for board training and orientation.
- Formally and informally assess the community's needs and priorities.
- Participate in the organization's annual or periodic planning and/or long-term planning.
- Provide evaluation of the organization's mission development, planning, funding, activities, structure, opportunities and problems.
- Ensure that statutory or technical requirements are met such as filing annual reports, withholding employee's taxes, meeting grant requirements and so on.
- Require a well-developed written internal financial control system and assure it is followed.
- Require regular (monthly, for instance) written financial reports that provide the necessary information in a clearly understandable manner.
- Require an annual written internal or professional audit to be conducted with the results reported directly by the auditor to the board or a designated committee.
- Assure the minutes are accurate, fairly represent the decisions made by the board, are timely and that dissents and abstentions are recorded.
- Avoid any sign or semblance of any self-dealing or enrichment. Discourage any business between directors and the corporation unless conducted entirely open and with tight, stringent safeguards.
- Disclose any conflict of interest related to board or organization business.
- Review the organization's conduct of any unrelated business enterprises or income and assure yourself that it complies with state and federal tax law.
- Support the organization with an annual contribution within your economic means.
- Represent the organization in the community at large and communicate with the public to offer and receive information about the organization in an accurate fashion.
- Advocate for the organization for funding and in necessary political arenas.
- Support and maintain written ethical standards for the board.
- Make no financial profit and receive no pay from the organization except as provided by law, the bylaws or for reasonable travel.
- Resign from the Board prior to seeking employment with the organization.
They reasonably demonstrate the three duties of a board member: care, loyalty and obedience.
They also illustrate why the board is a team made up of "I's" to create, maintain and sustain the organization.