No matter if your business is commercial (for-profit) or an S or C corporation, a partnership, an LLC, or a non-profit, it needs clear direction and oversight. This is usually handled by a trustee or a board of directors.

Nonprofit and for-profit boards have many of the same responsibilities, including selecting and reviewing the CEO, establishing operating plans, safeguarding and allocating financial resources, assuring that policies are in accordance with ethical and legal requirements and advancing the organization’s mission. Nonprofits are also accountable for obtaining tax-exempt status, and meeting all legal requirements.

A well-functioning board requires the participation of dedicated people with a variety of abilities, knowledge and connections to ensure a solid financial future. For-profit and nonprofit boards should actively recruit and reach out to candidates who meet the criteria instead of waiting for potential members to approach them, to streamline the process of screening conducting interviews, making decisions, and consider candidate diversity (gender as well as socio-economic background, religion, race, nationality) as a significant factor.

Both boards for non-profits and for-profits have standing committees to assist them in their governance and management responsibilities. These include audit and compensation, governance and nominations, and executive. Other committees can be specific to the particular industry or type of organization for example, such as science and technology, collections and visitor engagement, quality and regulatory, or public affairs & social responsibility. Board members are required to disclose any potential conflicts of interest and refrain from voting or deliberating on issues that fall within their authority.

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