Governance

n the complex landscape of nonprofit corporations, the role of the board of directors is crucial in steering the organization towards its mission. To ensure transparency, accountability, and sound decision-making, boards must establish and implement robust policies and procedures.

The extent to which a board participates in its daily operations varies. Whether your board is a hands-on board or a policy-making board, several fundamental decisions must always remain in the board’s hands: 

Ultra vires is a Latin term conveying that acts outside the permissible scope of authority set forth in a corporation’s governing documents are an unauthorized activity that cannot be ratified by its Board of Directors. Although many states have effectively abolished this common law concept by granting corporations significant autonomy, ultra vires continue to be an important doctrine in the tax-exempt nonprofit context because such organizations are required to limit their powers to qualify for tax exemption.

The end of the year is a busy time for all nonprofits. Because of this, some obligations tend to slip through the cracks. Since the consequences can devastate a nonprofit, it is vital to ensure certain responsibilities are met by year-end.

3. Think Big. Boards without great leadership can get bogged down in the minutia. The minutia include the compliance and oversight responsibilities of the board. While it’s important to do these things well, it’s not the organization’s raison d’être. Great board chairs help steer the board clear of this phenomenon by keeping the board focused on their vision of the impact the board wants to make on the community the organization serves. Great board chairs understand that focusing on the organization’s breakthrough goals rather than busywork keeps the board energized and engaged.