Board of Directors Responsibilities

A board of directors can offer numerous benefits for both organizations and individuals. It’s a great way for you to gain experience in making and directing decisions, as well as to build a network and establish relationships with philanthropists or community leaders and can aid in advancing your career.

If they’re for-profit corporations or non-profit organizations, all boards are bound by a set of rules and guidelines that govern their activities. It is essential that those who are contemplating becoming a member of a board know these guidelines and know what obligations are.

Board members must be involved and active, attend regularly for meetings and scrutinize documents like financial statements and strategic plans. They should also be able to ask pertinent questions. They should be able to identify the organization’s longer-term and shorter-term goals as well as its resources and conflicts of interest.

In the case of a public company board members must also be prepared to take on an active role in the management of the company and respond quickly to crises to uphold their fiduciary duties and maintain a good governance standard. It is also the duty of the board to maintain a relationship with the community it serves, so be sensitive to their needs and expectations and participate in community outreach activities.

The boards of not-for-profit organizations need to focus on their stakeholders. These are usually the people they serve, the businesses that support them and the elected officials and government agencies who regulate them. They also include donors who contribute funds to their organizations. They also have the responsibility to implement systems that stop embezzlement and fraud and for establishing relationships between other community groups.