Many directors of not-for-profit organizations have little idea what their legal responsibilities as a board member might be. Let’s follow the logic for just a minute:

First, we must remember who owns a not-for-profit organization. There are no shareholders, as in a for-profit corporation, no partners or sole proprietors as in a small or family business. In fact, in a legal sense, the public “owns” the organization.

And the public, through the state government and also through the Internal Revenue Service, hands over stewardship of that organization to a board of directors. The board members hold the organization as a public trust, and have three legal duties:

• Duty of Care — they must make ordinarily prudent decisions that reflect reasonable care
• Duty of Loyalty — they must never use information gained by their position for personal gain, and must always act in the best interest of the organization
• Duty of Obedience — they must be faithful to the organization’s mission, and never act in a way that is inconsistent with the organization’s goals.

Some other duties arise from these three basic duties:

• Ensure the organization follows the law
• Approve all major contracts
• Attend most board meetings
• Hire and supervise the executive director
• Support the organization with a financial gift

Board members must hold themselves accountable to these basic responsibilities. Spend some time as a board discussing basic expectations, especially attendance and giving. Create a system of accountability — perhaps the most effective is an annual self-assessment, asking the basic question, “Am I fulfilling my duties as a board member?”

We cannot built the “world that works for everyone” without strong, trustworthy and accountable boards. Make sure your board hits the mark.