If your company is commercial (for-profit), an S or C corporation, a partnership, an LLC or a nonprofit it requires clear direction and oversight. Generally, this is provided by the board of trustees or directors.
Nonprofit and for-profit boards share a number of duties, such as selecting and review the CEO, creating operating plans, safeguarding and allocating financial resources, assuring the policies are in ethical and legal requirements and furthering the organization’s mission. Nonprofits are also accountable for obtaining tax-exempt status, and ensuring that they meet all legal requirements.
A functioning board requires committed individuals with different capabilities, experience and connections to help ensure a sound financial future. Non-profit and for-profit boards should proactively recruit and reach out to potential members who are qualified, instead of waiting for potential members to approach them, develop a simplified process for screening, interviewing and making decisions, and take into account candidate diversity (gender, socio-economic background, race, religion and nationality) as an important consideration.
Boards of non-profit and for-profit organizations generally have standing committees that assist them in their various management and governance responsibilities including audit and compensation (or human resources) as well as governance and nominating and executive. Other committees are focused on an industry or type like science and technology, collections and visitors engagement, quality and regulation or public affairs and social responsibility. It is a standard practice for board members to declare any potential conflicts of interests and disqualify themselves from deliberating and voting on matters that fall within their sphere of influence or of concern.
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