Nonprofit officers, directors, committee members, and others involved in the nonprofit's governance structure are often unclear as to their roles and responsibilities. And for good reason – some rights and obligations are determined by law, others by the nonprofit's articles of incorporation and bylaws, and still others by written policies and procedures or more informal arrangements. This article is designed to clarify the delegation of duties, explain the fiduciary duties imposed by law on nonprofit officers and directors, and suggest ways to protect volunteer leaders from personal liability.
The board of directors is the governing body of the nonprofit, responsible for the ultimate direction of the management of the affairs of the organization. The board is responsible for policymaking, while employees (and to a certain extent, officers) are responsible for executing day-to-day management to implement board-made policy. However, the ultimate legal responsibility for the actions (and inactions) of the nonprofit rests with the board. (Note that the term “directors” is synonymous with “board members.”)
The board can act legally only by consensus (majority vote of a quorum in most cases) and only at a duly constituted and conducted meeting, or by unanimous written consent (in most states, boards cannot act by mail or electronic ballot). The board may delegate authority to act on its behalf to others such as committees, but, in such cases, the board is still legally responsible for any actions taken by the committees or persons to whom it delegates authority. An individual board member has no individual management authority simply by virtue of being a member of the board. However, the board may delegate additional authority to a board member such as when it appoints board members to committees. In a similar fashion, an officer has only the management authority specifically delegated in the bylaws or by the board (although the delegated authority can be general and broad).