Commercial and Nonprofit Boards Or Directors
Commercial and nonprofit boards or directors are the legal governing bodies of various business entities. These businesses can be traded on a public stock market (a public company) or privately owned and not tax-exempt (a private or family limited liability partnership or company), or exempt from federal income taxes due to its charitable mission or purpose (a non-profit corporation).
Regardless of the type of business entity, boards are generally required to fulfill their fiduciary obligations like making sure that decisions are based on facts and the best interests of the business. Boards should be aware of the legal implications and ensure that they adhere to the requirements of their bylaws. This includes those that pertain to conflicts, fundraising, and other policies.
Keep in mind that the majority are volunteers and not paid. Therefore, board members must be interested and engaged in the work the board is doing for the community.
One way to keep a non-profit board in good standing is to provide them with a non-legally binding contract that clearly outlines the key roles, responsibilities and expectations. This will help reduce the amount of back and forth, and meetings needed to report.
Another method of improving the performance of a nonprofit board is to include diversity. A mix of people from diverse backgrounds and viewpoints can prevent myopia and groupthink. It is essential to select people with diverse backgrounds, particularly those who are directly affected the social issues that your non-profit addresses. Other factors to consider include the age, ethnicity, professions, work style, political ideology, and location.