No matter if your business is commercial (for-profit) or an S or C corporation, a partnership, an LLC, or a non-profit the organization requires clear direction and supervision. Generally, this is provided by the board of directors or trustees.
Boards of nonprofit and for-profit organizations have many of the same duties, such as selecting and evaluation of the CEO, setting operating plans, securing and allocating financial resources, ensuring that policies are in line with the law and ethical standards and furthering the organization’s mission. Nonprofits also have the responsibility of getting tax-exempt status and meeting all legal requirements.
A well-functioning Board requires dedicated individuals with different skills knowledge, experience and contacts to ensure that the financial health of the business is secured. Non-profit and for-profit boards should proactively recruit and reach out to qualified candidates instead of waiting for potential members to approach them, make a more efficient process of screening, interviewing and making decisions, and take into account the diversity of candidates (gender, socio-economic background, religion, race and nationality) as a crucial factor.
Non-profit and for-profit boards typically have standing committees to assist in addressing their various management and governance obligations, such as audit, compensation (or human resources) as well as governance and nominating, and executive. Other committees are specialized to certain types of industries of organization, such as science and technology, collections and visitors engagement, quality & regulation, or public affairs &social responsibility. Board members are required to disclose any potential conflicts of interest and not vote or debate on matters that fall under their influence.
