Duty of Care
This is part 1 of a three part series on the duties of board members.
It is so easy to think that the Executive Director is responsible for everything the nonprofit does, however, it is not only the role that board members play, but their duty to the organization as board members that is often overlooked or misunderstood.
Board members have a responsibility to be active in the affairs of the organization. This starts with attending all board and committee meetings, training, and organization events. Failure to attend meetings and events is the same as not participating in the discussions. Board members are obligated to care for the organization and make sure their voice is recorded.
The Duty of Care also means that there is an obligation to participate in fundraising, deliberation of compensation arrangements, developing and approving the budget, evaluating the Executive Director, and making sure the organization is funded adequately. Board members also need to make sure that they use the same care and skill as they use in their own affairs.
Although popularized over the past several years, social entrepreneurship is not an acceptable way of removing the responsibility of board members to fundraise and to fund the organization in hopes that business ventures will fill shortcomings. This approach creates separation from the mission and diverts attention that should be focused on advocacy and development leaving the board to think of the organization as a business, not a charity.
In order to act on compensations, fundraising, budgets, etc. it is imperative that board members read all pertinent organizational literature, review the financial accounts, and how they compare to the budget. Independent judgement is critical for honoring the Duty of Care for a board member. According to Ohio Attorney General, Mike DeWine, “Board members who know the facts, analyze the probable result of their actions, exercise sound judgment, and keep reasonable records fulfill their duty of care. Those who are regularly absent from meetings, who are inactive, or who fail to conduct adequate research prior to making decisions do not.”