No matter if your business is commercial (for-profit), an S or C corporation, a partnership, an LLC, or a non-profit, it needs clear direction and oversight. This is typically handled by a trustee or a board of directors.
Boards of for-profit as well as non-profit organizations have many of the exact same duties. They are responsible for selecting and evaluating the CEO, preparing operating plans, allocating and protecting the financial resources, ensuring that policies are in compliance with the ethical and legal requirements and advancing the organization’s mission. Nonprofits also have the responsibility of obtaining tax-exempt status, and complying with all legal requirements.
A well-functioning Board requires individuals with different skills know-how and contacts to ensure that the financial stability of the company is assured. Non-profit and for-profit boards need to actively recruit and reach out to potential members who are qualified, rather than wait for prospective members to approach them. to streamline the process of screening conducting interviews and making decisions, and think about the diversity of the candidates (gender and socio-economic background race, religion and nationality) as an important consideration.
Non-profit and for-profit boards generally have standing committees that help them with their diverse management and governance obligations including audit and compensation (or human resources) as well as governance and nominating and executive. Other committees are focused on an industry or type of organization, such as science and technology, collections & visitors engagement, quality and regulation, or public affairs &social responsibility. Board members are required to disclose potential conflicts of interest and refrain from voting or deliberating on issues under their influence.