Armanino Blog

What's a Nonprofit Board's Proper Role?

by Dean Quiambao
January 15, 2016

Often, we see a difference between what a nonprofit board thinks it should be doing and what it is actually charged with doing.

At the highest level, the board is responsible for governing in a sound, ethical and legal manner. It is also charged with providing independent oversight of the organization’s finances.

On a more practical level, board members are advocates for the nonprofit’s mission — whether that’s feeding the homeless or providing arts education to kids. They provide direction and guidance so that the organization can best fulfill its mission.

Problems occur when a board starts getting into the business of “doing” rather than “directing.” The board starts micromanaging staff and meddling in day-to-day operations. It oversteps its bounds by telling executive leadership how to execute specific tasks.

To use a sailing analogy, board members don’t need to be on the bridge with their hand on the wheel. Steering the ship is the job of the CEO or Executive Director. What the board should be doing is meeting in the chart house to plot a course. Reviewing their position and bearing, they set the ship on a course to its destination. Once the heading has been selected, they trust the captain to set sail and steer wisely. They then convene regularly to ensure that the ship is, indeed, headed in the right direction.

What Boards Should Be Doing
Resisting the urge to “do” rather than “direct” requires that the board first and foremost understand its purpose and function. For many nonprofits, that starts with solid board member orientation followed by ongoing training on duties and responsibilities throughout the year.

Here, a well-trained board understands that its primary duty is to fulfill three key roles:

1. Offer insight. If the nonprofit has recruited strategically, it should have a board full of passionate, committed individuals representing a diversity of skills and backgrounds. That well-rounded board can then provide valuable insight on the strategic direction of the organization from a variety of viewpoints.

2. Exercise foresight. Rather than getting head-down in day-to-day operations, the board should always be heads-up — scanning the environment and looking for the next opportunity. Through task forces and ad hoc work groups, it provides foresight and guidance, shaping strategy as to where the organization should be moving next.

3. Providing oversight. Finally, a properly functioning board provides oversight on execution of the strategic plan. Is the organization meeting its mission and serving those it was designed to serve? Is it having an impact? Is it being true to its vision and values?

Who Manages Who?
Yes, the CEO or Executive Director is an “employee” of the board. That’s the relationship. Yet it’s critical for executive leadership to be able to push back when the board drifts off course. In the end, the difference between doing and directing is the difference between managing and governing. The CEO or ED should be a strong enough leader to rein things in when a board stops governing and starts managing.

January 15, 2016

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