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Board Roles Responsibilities

BoardEffectwww.boardeffect.com. 2. Goals for this Session. Review non-profit board roles in contextDescribe board roles and responsibilities the art of steering" the organizationProvide examples, details of board roles, group discussionExplore areas for further development for you and your board (self-assessment).

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Board Roles Responsibilities

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    1. Board Roles & Responsibilities

    2. BoardEffect® www.boardeffect.com 2 Goals for this Session Review non-profit board roles in context Describe board roles and responsibilities – the “art of steering” the organization Provide examples, details of board roles, group discussion Explore areas for further development for you and your board (self-assessment)

    3. BoardEffect® www.boardeffect.com 3 What Is a Non-profit? Organizations dedicated to promoting charitable causes Governed by voluntary boards of directors Do not have the generation of profit or disbursement of revenue to shareholders as the primary purpose Regulated by Canada Customs & Revenue Agency’s Charitable Division Tax exempt Charities can issue receipts donors can use to claim deductions on their taxes Charities must use 80% of receipted gifts must be used for charitable purposes Charities have to register with CCRA Both have to file annual tax forms within 6 months of FY closeCharities can issue receipts donors can use to claim deductions on their taxes Charities must use 80% of receipted gifts must be used for charitable purposes Charities have to register with CCRA Both have to file annual tax forms within 6 months of FY close

    4. BoardEffect® www.boardeffect.com 4 Canadian Non-profit Sector ~200,000 non-profits in Canada Employs 2 million+ Represents 8.5% of GDP Adds $75.9 billion to the economy 40% of volunteers serve on boards “The Canadian Nonprofit and Voluntary Sector in Comparative Perspective,” Imagine Canada and Johns Hopkins University, 2005 ionion

    5. BoardEffect® www.boardeffect.com 5 Board of Directors Board serves as the leadership of the organization Board stewards the mission and serves as the “eyes and ears” of the organization Board members deliberate issues independently, in committee, and collectively as a body, but speak with one voice

    6. BoardEffect® www.boardeffect.com 6 Non-profit Management Accountability

    7. BoardEffect® www.boardeffect.com 7 Organizational Basics

    8. BoardEffect® www.boardeffect.com 8 Board Member’s Legal Duties Duty of diligence Act reasonably, prudently, in good faith and with a view to the best interests of the organization and its members Duty of loyalty Place the interests of the organization first, and to not use one’s position as a director to further private interests Duty of obedience Act within the scope of the governing policies of the organization and within the scope of other laws, rules and regulations that apply to the organization “Directors’ Liability: A Discussion Paper on Legal Liability, Risk Management and the Role Of Directors in Non-Profit Organizations,” Volunteer Canada, 2002.

    9. BoardEffect® www.boardeffect.com 9 Duty of Diligence Acting in the best interests of the organization Adhering to professional standards – even when you’re off duty (e.g., accountant) Taking time to research & deliberate Staying well-informed of activities and finances Anticipating consequences of decisions

    10. BoardEffect® www.boardeffect.com 10 Duty of Loyalty Interests of organization come first Disclosing/avoiding conflicts of interest Maintaining confidentiality Board acts as one entity – decisions of the board are spoken with one voice

    11. BoardEffect® www.boardeffect.com 11 Duty of Obedience Understanding and adhering to the organization’s bylaws, policies, rules & regulations Ensure others adhere to the rules Ensure documents are current & accurate Make sure organization abides by all appropriate laws (for employers, etc.)

    12. BoardEffect® www.boardeffect.com 12 5 Main Areas of Governance Vision, Planning & Evaluation (VPE) Financial Management & Fundraising (FM/FR) Human Resources (HR) Advocacy & Community Relations (A/CR) Organizational Operations, including Board Self-Governance (OO)

    13. BoardEffect® www.boardeffect.com 13 Board Responsibilities The Board’s Primary Responsibilities: Determine mission and purposes (VPE) Select the chief executive (HR) Support & evaluate the chief executive (HR) Ensure effective planning (VPE) Monitor & strengthen programs & services (OO, VPE) “Ten Basic Responsibilities of Nonprofit Boards,” Richard Ingram, BoardSource, 2009.

    14. BoardEffect® www.boardeffect.com 14 Board Responsibilities Continued Ensure adequate financial resources (FR/FM) Protect assets and provide financial oversight (FM) Build a competent board (OO) Ensure legal and ethical integrity (OO) Enhance the organization’s public standing (A/CR) “Ten Basic Responsibilities of Nonprofit Boards,” Richard Ingram, BoardSource, 2009.

    15. BoardEffect® www.boardeffect.com 15 #1: Steward the Mission Making sure the mission is clearly and accurately stated What the organization is and does Defining the vision Where the organization is heading Provides the roadmap and drives the organization Used as the compass for all programs and services

    16. BoardEffect® www.boardeffect.com 16 Personal Connection to the Mission In groups, discuss your own connection to your organization’s mission or vision What brought you to the organization? What keeps you coming back? What skills do you bring to the board? How engaged are you in board activities? What impact are you having on achieving the mission?

    17. BoardEffect® www.boardeffect.com 17 #2: Hire the Executive Director If the organization has paid staff, the board has one employee, the Executive Director If there are no paid staff, the board takes a more hands-on role in management, as well as governance Ensure the chief executive role is clear, with a written job description, and tied to strategic goals Personnel committee Clear expectations on both sides Experience, expertise required for the job Determine compensation Conduct search – due diligence

    18. BoardEffect® www.boardeffect.com 18 #3: Support & Appraise the Executive Director Two-way communication – ongoing feedback, input Process for performance reviews that the ED knows about and is comfortable with Acknowledging performance appropriately (e.g., compensation increase, public recognition, constructive feedback, etc.) Chair and ED work together to ensure the board is functioning well

    19. BoardEffect® www.boardeffect.com 19 #3: Support & Appraise the Executive Director Introduce the ED to important contacts Invite ED to important social functions Receives recognition for good work Encouraged to take time off “Daring to Lead” 2/3 nonprofit ED’s are in role for the first time Fewer than half plan to take another ED role Longest tenured ED’s feel supported by board

    20. BoardEffect® www.boardeffect.com 20 #4: Vision & Planning Ensure planning takes place regularly Strategic planning committee Participate actively in the planning process Evaluate the process, not just its results Formally approve agreed-upon priorities Use the priorities to structure board meeting agendas, budgeting, other discussions

    21. BoardEffect® www.boardeffect.com 21 #4: Vision & Planning Role in planning encompasses: From the “MFRC Board Orientation & Training Manual” Strategic planning Ensuring adequate community needs assessment Identifying service priorities Developing annual organizational goals, objectives and performance indicators Ensuring organizational evaluation & service evaluation Sample Strategic Plan available here: http://ctb.ku.edu/en/dothework/tools_tk_content_page_193.htm

    22. BoardEffect® www.boardeffect.com 22 #5: Monitor & Strengthen Programs Ensuring the activities of the organization align with the stated mission and purposes Program committee Focus on the organization’s impact What information will help us assess effectiveness? What difference are we trying to make? How do we know whether we are making a difference and meeting the mission?

    23. BoardEffect® www.boardeffect.com 23 #5: Monitor & Strengthen Programs Periodically review the effectiveness of programs and services Make it part of the planning process Reviewing all existing programs through the lens of priorities, mission Cost-benefit ratio; user satisfaction; competition Due diligence for proposed new programs

    24. BoardEffect® www.boardeffect.com 24 #6: Ensure Financial Resources Identifying sources of revenue & balance Government funding Funding from foundations Donations from individuals, corporations Earned revenue

    25. BoardEffect® www.boardeffect.com 25 Board vs. Staff Roles in Fundraising Board Roles: Create overall fundraising policies Organize & participate on fundraising committees Identify and cultivate donor prospects Make introductions for staff to follow-up Ask peers for donations Make a donation yourself Express thanks to donors Staff Roles: Create specific fundraising plans Support the work of the fundraising committees Research new and existing donors Write case materials Accompany board on solicitation visits Write proposals Take care of logistics

    26. BoardEffect® www.boardeffect.com 26 #7: Financial Oversight Review/approve budgets Stay informed of how/where the organization spends money, without micro-managing Establish monetary policies Finance committee Reviewing revenue/expenses against budget Policies on expenditures, check-writing, etc. Investment Policy, Gift Acceptance Policy

    27. BoardEffect® www.boardeffect.com 27 #7: Financial Oversight Ensure financial systems and practices conform to accepted standards Monitor money management Able to read/understand monthly financial statements & cash-flow position Review quarterly Statement of Financial Position Review the Annual Audit Audit committee, separate from finance committee Independent auditor (change every 5 years)

    28. BoardEffect® www.boardeffect.com 28 #8: Board Development Recruit & retain talented board members Ensure all members are consistently held to account to do their jobs well High-functioning boards depend on the work of the governance committee Nominations, search for talented members Board orientation and training Assessing board performance

    29. BoardEffect® www.boardeffect.com 29 Self-Assessment Complete the MFRC Board Member Training Self-Assessment Complete the MFRC Governance Performance Assessment Identify areas for improvement for you individually and collectively for your board

    30. BoardEffect® www.boardeffect.com 30 #9: Board Self-Governance Ensuring compliance Three duties of non-profit boards Legal requirements – local, provincial, national MOU MFRC recommendations for best practice

    31. BoardEffect® www.boardeffect.com 31 #9: Board Self-Governance Ensuring transparency Clear policies Accessible documentation – board manual, meeting minutes, committee notes (board portals) Regular communication with stakeholders Respond to requests from media (as appropriate, in keeping with policies)

    32. BoardEffect® www.boardeffect.com 32 #9: Board Self-Governance Ensuring accountability Code of ethics Conflict of interest policy, rigorously enforced Review disclosures and act on them appropriately Whistleblower protection policy Consistent application of personnel policies Annual audit Regular reporting to stakeholders

    33. BoardEffect® www.boardeffect.com 33 #10: Enhance Public Standing Board serves as the organization’s link to the community Representatives of the community being served “Eyes” and “ears” Representative of the organization; advocate & educate the public about the organization Able to give an “elevator speech” Able to answer media inquiries

    34. BoardEffect® www.boardeffect.com 34 Your Elevator Speech You are in an elevator with Mr. Bigbucks, an important potential donor. You are traveling from the 30th floor to the 1st floor. You have 30 seconds to introduce him to your organization and entice him to learn more. What do you say?

    35. BoardEffect® www.boardeffect.com 35 Recap & Next Steps What did you learn today? What do you want to learn more about? What will you do to follow-up?

    36. BoardEffect® www.boardeffect.com 36 Thank You! Dottie Schindlinger, Executive Vice President BoardEffect® 161 Leverington Avenue, Suite 1001 Philadelphia, PA 19127, USA Phone: 215-508-4920 ex. 14 Fax: 215-508-4590 Email: dschindlinger@boardeffect.com Web: www.boardeffect.com

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