Role of the Board

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In this section:

The Board as a Group
Key Governance and Management Functions

The Board as a Group

As a diverse group of individuals, the most challenging aspect of board work is to function as a cohesive group, striving to achieve agreed-upon goals and objectives in order to carry out the purpose of the agency. It is critical that board members make   decisions as a group. Even though individual board members may not agree with the group’s final decision, it is important that they support it. Working together requires that board members learn to solve problems and make decisions in an environment that encourages trust and respect for different ideas and points of view. The emphasis must be on open, honest communication, with the final result being group support for all board decisions.

A board cannot function effectively when domination exists by the president, executive director, a committee or any other individual or subgroup.

In order to function effectively as part of a group, each board member should:

• recognize that different people play different roles in the agency and may see issues from a different perspective
• recognize that when members ask challenging questions, they may not be trying to be difficult, but instead are just "doing their job"
• listen with an open mind to all opinions, options, questions, and concerns on issues
• appreciate that different opinions and perspectives provide more information on which to base decisions

Working as a group will result in a more effective board, as long as members understand the level of responsibility that is expected of them.

Key Governance and Management Functions

The single most important role of the board is that of public trust. The board of a nonprofit agency, incorporated under provincial legislation, is legally and morally responsible to serve the public good. This includes accountability to the funding source which may be a foundation, government department or another volunteer organization. The legal and moral responsibilities of public trust are discussed in further detail in the Legal Accountability section.

The following excerpt is from Gaining Momentum, for Board Action by Arty Trost and Judy Rauner: "When you accept a position on a board of directors, you are agreeing to help run the organization to the best of your ability. You are also agreeing to learn about the organization so you can make sound decisions that are needed to run it effectively. This means you agree to fulfill certain responsibilities that are common to all governing boards."

The following is a brief overview of the key governance and management functions of a board. It is important to note that in order for a board to fulfill these diverse responsibilities, it should recruit members who have the skills and knowledge necessary to serve the agency in each of these areas. They are:

• Planning and Program Governance
• Policy Management
• Financial Management
• Personnel Management
• Public Relations
• Summary
• Role of the Board Assessment (PDF)

These topics will also be discussed in further detail in other sections of the guide.

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Planning and Program Governance

Planning begins with the determination of goals and objectives for the agency. A major responsibility of the governing board is to ensure a course of direction is set for the future of the agency. Whether dealing with an agency’s mission or one of its specific projects, the planning process must answer three basic questions:

• Where are we now?
• Where are we going?
• How are we going to get there?

A board must:

• set goals that can be supported by specific activities
• determine which services and programs are appropriate for the agency in order to meet its goals
• ensure that there are sufficient resources to implement such activities.

Often the planning process will reveal that although the goal is agreed-upon and beneficial the agency simply lacks the resources, whether it is people or funds, to achieve it. In such cases, the board must raise funds or modify the plan.

If the board fails to plan effectively, the organization will run on a day-to-day basis without clear program priorities and, quite possibly, without sufficient funds. Therefore planning is the cornerstone of the agency.

Without planning, an agency may lose its focus and become reactive to crises. In times of uncertainty, planning may be more difficult, but it also becomes more essential.

Values and beliefs are the driving forces in non-profit social service agencies. These organizations exist not to make a profit but to carry out a function that is important to the health and functioning of society. Planning must be undertaken with an understanding of, and commitment to, the mission and purpose of the organization, giving full consideration to current financial realities.

Program development requires the input of the executive director and agency staff but remains the responsibility of the governing board. Program management means establishing the amount of the agency’s resources to be used for programs and services, then monitoring and evaluating those programs and services.

Further discussion of the planning process and program management of a governing board may be found in the Planning and Program Governance section.

Policy Management

An agency depends on its board to carry out policy management. It includes developing, establishing, implementing and evaluating written policies in order to provide both the board and staff with the clear authority and guidance to perform their jobs.

Policies are the fundamental principles of agency operations and should represent the long-term decisions on which the agency is built. These policies will provide the board with the guidance to define the scope of services the agency offers, the clients it serves, and the staff and funding it requires. Policies are also needed to provide guidance to the board on how it wishes to operate.

The governing board is responsible for policy management in the following areas:

• establishing and updating the constitution and by-laws for the agency
• defining roles and responsibilities of board members, committees and staff
• defining organizational structure and reporting relationships
• establishing policies relating to finances, personnel, programs, reporting protocols and public relations
• preparing and updating the policy manual

Though policy development may seem time-consuming, written policies provide the agency with the necessary stability it needs to grow in the future. In addition, written policies can be valuable in the long-term by reducing repeated discussions on the same topics or issues.

The policy governance function of the board is discussed in detail in the Policy and Procedures section.

Financial Management

The board is responsible for the management and administration of agency affairs through financial management. When a board establishes or approves a budget, it approves the expenditures and commits to obtaining the needed revenue. The board as a whole is legally accountable for the sound financial management of the organization; therefore, a budget should not be approved until it matches the revenue the agency will be receiving or generating.

The board needs a financial reporting system that will provide it, and the funding source(s), with the information needed to ensure that the funds are being used in the best interests of the organization. An effective financial reporting system will alert the board if budgeted revenues are not being realized or if expenditures are greater than planned.

Financial management of the board includes establishing and monitoring the budget, as well as participating in and overseeing fund-raising activities. It also means managing the organization’s assets. Governing boards must remember the following points when performing their financial governance function:

• establishing or approving the budget means the board approves the expenditure plans and commits to securing the required revenues
• the board must receive and approve regular financial statements showing current and budget figures
• the board is legally responsible for sound financial management and, in certain circumstances, individual board members may be held personally responsible
• all board members must be knowledgeable about the organization’s affairs
• all board members are expected to participate in securing needed revenues

Sound financial governance is critical to the success and credibility of any agency. The Financial Management section reviews the basic steps of financial management and the board’s financial governance responsibilities.

Personnel Management

The board has a responsibility to set sound personnel policies for both paid and volunteer staff. Personnel management means defining roles and responsibilities for board members, staff and volunteers including overseeing the recruitment, training, evaluation and retiring of board members. It also involves reviewing and assessing the leadership and effectiveness of senior staff. As part of the board’s personnel governance function, it is important to realize the following:

• policies are needed to clarify roles, responsibilities and functions to hold board members and staff accountable
• board recruitment and rebuilding should be an ongoing process
• it is the responsibility of the board to recruit, select, supervise, evaluate and, if necessary, replace the executive director
• the board and staff need to be evaluated on a regular, formal basis

Board members and staff who understand their respective roles and the importance of working in partnership are critical components of a healthy organization. Therefore, it is important for the board to develop and maintain a positive relationship with staff.

Details on these personnel management functions can be found in the Board/Staff Relations, Board/Executive Director Relations and Board Succession and Orientation sections.

Public Relations

Developing the agency’s image and identity within the community is another key responsibility of the board. Every board member is a representative of the agency and has the responsibility to ensure that the community appreciates the agency’s values and visions. Identity management means developing community awareness by representing the agency to the community, government, corporations and funding organizations. This includes reporting on the programs, services and future plans of the agency.

The following public relations tasks are important to developing and maintaining a positive public image:

• develop a communications strategy to keep the community informed and supportive
• ensure that people who will "tell your story" will play a strong role in representing the agency
• develop a plan for board members to secure additional funding through fundraising activities

Continual promotion of the agency’s identity in the community is important for an agency to be successful at fund-raising. It also helps to ensure that those who need the agency’s services are aware of the service or that those people in a position to refer clients are familiar with the services available.

Summary

Many responsibilities of the governing board of directors have been discussed in this section. It is important for the board to review each of these areas regularly to ensure that the organization is moving in the direction intended. It should be noted once again that members of governing boards are collectively and individually responsible for the activities of the organization. Any board that operates by "rubber-stamping" the executive director’s recommendations must be aware that they are responsible for that decision. If losses or problems occur, it is the board that will be held accountable. Therefore, members should exercise the same degree of care in the management of the agency that they would on behalf of their own affairs.

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