Role of board of directors cannot be ignored because it governs a charity as a body. It is upon the board of directors to manage the organization’ affairs as per the fiduciary duties lay down by nonprofit corporation law. With the key role of these director’s being stewardship, being loyal and caring are the duties of trust are essential.
Role of board of directors in form of duties in charity organizations
Duty of due care is about the board acting with judgment that is informed and common sense. The directors need to competently utilize their power with the charity’s interest at heart. This means that that they must participate actively and enquire reasonably. To participate actively the board must remain current in terms of performance and dealings of a charity. Consequently the directors’ should attend meetings and evaluate reports that the senior management has submitted. Directors need to be individuals with a capability of making decisions in regard to issues affecting the charity.
The role of board of directors also includes the duty of loyalty. The role of board of directors here is giving loyalty that is undivided to the charity and acting with the organization’s interest at heart. It is not guaranteed that directors will personally benefit from the information that they gain through their positions. When a director achieves benefits that are un due, he is penalized by IRS. Charities are advised to have policies that are written to avoid conflicts of interests.
Duty of obedience is the other role of board of directors. The directors are expected to obey federal and state laws touching on charity when conducting its business. Others that are included are IRS regulations together with requirements for income tax fillings, state registration regulations and charitable gaming laws.
Role of board of directors-additional duties
The organization’s effectiveness and health is the responsibility of boards. The main duties here include establishment of policies and objectives, approval of strategic plans, management of financial resources and selection and evaluation of senior staff. It is also the role of the board to enhance the public image of the charity and to evaluate its own performance. Among the important tasks of these boards is selection of CEO whose work is supervision of the organization’s daily operations.
It is upon the board to maintain corporate records. Included here is amending bylaws of the charity when need be. Minutes of meetings which are schedules regularly need to be maintained and those of annual general meetings too.
In terms of liability, board members that are volunteers are protected by the law through what is termed as qualified liability. When they violate the role of board of directors, no one can sue them. However, in many states, protection is only offered when the legal status of the organization have been appropriately maintained by the board. Such a board also ought to have complied with every legal requirement. When the federal tax law has been violated by a charity organization, the directors may assume professional liability through IRS.