A nonprofit’s board of directors is responsible for defining the organization’s mission and for providing overall leadership and strategic direction to the organization. Each nonprofit board should: 1) actively set policy and ensure that the organization has adequate resources to carry out its mission; 2) provide direct oversight and direction for the executive director and be responsible for evaluating his/her performance; and 3) evaluate its own effectiveness as a governing body, as a group of volunteers, and as representatives of the community in upholding the public interest served by te organization.
No more than one employee of the organization (typically the chief executive) should serve as a voting member of the board and he/she should not serve as chair or treasurer of the board.
Although Connecticut law allows for fewer members, the board should be made up of at least five persons unrelated to each other or to staff, to ensure appropriate deliberation and diversity.
A nonprofit board should be comprised of individuals who represent the best interests of the organization.
The board should establish a process for selecting new board members that will ensure infusion of new ideas and community perspectives, while preserving institutional memory.
To demonstrate personal stake in the organization, board members are expected to make personal financial contributions to the nonprofit, as well as to raise funds from external sources.
Board members (who are not employees) should receive no monetary compensation.
Board meetings should be held at least on a quarterly basis and regular attendance should be expected.
At a minimum of every two years, the board should review the organization’s bylaws and mission statement and amend as needed to reflect organizational growth and development.
Annually, the board should review and approve an annual budget for the organization.
Annually, the board should conduct a performance review of the chief executive. The chief executive’s performance should be assessed in light of organizational accomplishments, and the total compensation package (salary, raises, bonuses and other benefits) should reflect his/her performance, as well as industry standards.
The board should establish a succession organizational transition plan to maintain daily operation during the time of a change in executive or board leadership.
Nonprofit board members are responsible for making decisions in the interest of the organization and not in the interest of another entity, including themselves. The board should establish conflict of interest policies regarding board members, staff, volunteers, consultants and other contractors, and adhere to these policies in all dealings. The policies should include an obligation of each board member to disclose all material facts and relationships and refrain from voting on any matter when there is a conflict of interest.
Nonprofits should establish a formal risk management plan, which is monitored by a dedicated committee of the board (e.g. audit committee or executive committee).
Indicates "must" practices required by state or federal law