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Legal Duties of Every Board Member
The requirements of nonprofit organization volunteer board members are many. Although not every skill set or competency need be present before joining the board, from their first day on the job forward all directors must understand and commit to certain legally imposed fiduciary duties.

There are three such duties. They are the duty of care, duty of loyalty and duty of obedience. Each one is unique and critical to the success of the overall organization. A failure to fulfill any of these duties may expose a director to personal liability. However, if board members successfully manage these requirements, they are well-positioned to succeed in serving their organization.

Duty of Care – Directors must act in a reasonable, honest, fair and informed manner. Board members might not always be right, but they must always be careful, thoughtful and thorough with their decision making. It is also critical to pay attention to the organization’s activities and operations. Directors need to participate in all board activities and be well-informed, prepared and attentive. Providing financial stewardship is also a critical responsibility that falls under duty of care.

Duty of Loyalty – It is important for directors to give their undivided allegiance to the organization, the board of directors and the organization’s members. Directors must maintain confidentiality of board discussions and externally support all board decisions. They should exercise their powers in good faith and in the best interests of the organization, as well as never use their positions for personal advantage. They should avoid conflicts of interest, providing full disclosure and obtaining board approval when necessary. (For more information regarding conflicts of interest, read the article: “Attorney Paula Goedert on Clearing Up Associations’ Conflicts of Interest.”)

Duty of Obedience – Directors must be faithful to the organization’s mission and always act in a manner consistent with the association’s mission and goals. They should ensure the organization operates in compliance with the laws that govern it as well as its governance documents and board policies.

The responsibilities of board members can be numerous and some are more mission critical than others. Few, though, are more important than these three legal duties. Boards should be mindful to discuss these areas on a regular basis and to orient new board members about them when their service begins.

 

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MARCH 2015 EDITION
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Board Forward is published 10 times a year by SmithBucklin, the association management and services company more organizations turn to than any other. SmithBucklin has served volunteer board members for more than 60 years.

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