The board of directors for a nonprofit organization is the governing body that has the ability to direct an organization to success or failure. A board that leads an organization to success has diverse members who are accountable to the organization, have received appropriate training, and are continually rotating.

Skills & Demographics

Finding quality board members can be a difficult task, which sometimes leads to filling open positions with anyone who is interested. While interest is a good trait to have, a potential board member must also have traits beneficial to the organization such as a background in law, finance, or management. Also, be sure to build a board with a mixture of demographics; consider age, gender, and ethnicity. The diversity of skills and demographics will bring various ideas to the table ensuring quality decisions.

Recruitment for a member should be ongoing. During the process, focus more on abilities than titles alone. For example, a CPA who works primarily with gift tax returns may not be as valuable as a non-CPA business manager who has experience in budgeting and reviewing financial statements.

Responsibilities & Training

The board’s responsibilities include voting on important issues, creating strategic plans, approving and reviewing budgets and hiring key employees. Potential board members should be well aware of their responsibilities and must be able to commit to attending all meetings and events, barring any unforeseen circumstances. The board cannot be effective if members are consistently absent when decisions need to be made. Consider implementing an attendance policy, excusing members of their duties after too many unexcused absences.

The board should also be active in the organization’s events and daily operations. When a board has members who volunteer and are active in the organization, it provides oversight and also helps the board better understand the mission and how to improve services.

Once appointed to the board, a new member will need to be trained. This process can be formal or informal, but it should include activities that allow the new member to become familiar with the governing documents, policies and procedures, and important history of the organization.

Board Rotation

The board should constantly seek new members and retire members who have served for a long time. This will help keep a fresh perspective and prohibit creating a stale board. Establishing term limits is an easy way to keep the board rotating. Consider 2-3 year terms with reappointments possible, and establish a cap on number of terms. Some boards may require a non-officer role before being eligible for a position as an officer. Be sure to stagger member expirations so there are always a few members with experience. This will ensure institutional memory of the board is retained.

The board of directors is a vital part of every organization. Making sure the right members are elected, informed and trained ensures a successful board. If there is anyway we can help you with board development, please contact a member of our nonprofit service group.

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Joe Nurmi
I joined the Hawkins Ash CPAs accounting and auditing staff in 2014. As a manager, I prepare audited, reviewed and compiled financials.

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