The Role of the Board is Pretty Darn Clear
Your board does corporate governance. That’s your board’s purpose.
What is corporate governance? The process whereby a group of people (typically called a board) ensure the health and effectiveness of the organization.
Corporate governance is a group process, a collective act. Corporate governance only happens when the board is together at its meetings.
Every organization needs a job description for its board. And the job description is pretty much the same for every single nonprofit. And the job or role of the board is, essentially, the same for for-profit corporations, too.
So here’s the job of the board, its role. You can use different words that better suit your organization but the content is the content.
Job description / Role of the Board
The Board of Directors is legally and morally (ethically) accountable for the health and effectiveness of the XYZ Organization. The Board ensures that the organization achieves its mission in an ethical, transparent, accountable, and prudent manner.
The Board’s job is governance, the ongoing process of due diligence whereby the Board operates as a collective to assure corporate health and effectiveness. Specifically, the Board is accountable for the functions described below. The Board operates in a manner outlined in its policies.
The Board works in partnership with its CEO as articulated in various policies. The CEO provides leadership and support, enabling the Board to carry out its governance responsibility.
Board Functions | Scope of Authority
All of this is accomplished as a group – at board meetings – through review of information, strategic questioning, dialogue, and decision-making.
- Articulate values and mission, and set standards, controls, and policies. Ensure that all the organization’s programs, activities, and operations adhere to these policies.
- Ensure that the organization is relevant to the community through processes that monitor the external environment and define vision, direction, and strategy.
- Define and monitor key areas of performance compared to short- and long-range strategy / plans, assess results, and assure that steps are taken for continuous quality improvement in all areas.
- Ensure that the financial structure is adequate for current priorities, long-range strategy, sustainability, and intergenerational equity.
- Ensure that adequate risk management is in place, e.g., safety and security, insurance, data back-up, CEO succession, etc.
- Determine eligibility for Board membership, assure proper recruitment of candidates, elect members and officers, and assure proper orientation and mentoring of Board members.
- Define and enforce parameters of the Board’s work including its committees / task forces and the role and performance of the individual Board member. Assess effectiveness.
- Hire the organization’s chief executive officer. Appraise his/her performance and set compensation; reward competence, or if necessary, replace the individual.
- Ensure compliance with relevant laws and regulations affecting the organization.
- Ensure effectiveness of management, without intruding in management’s role and authority.
- Provide candid advice and perspective regarding the organization’s health and effectiveness and the marketplace environment, without compromising management’s authority.
So how effective is your board? Conduct a governance self-assessment. See the sample in the Free Download Library on my website, www.simonejoyaux.com.