Board member roles and responsibilities vary from one organization and industry to the next, but there are common themes. Examine what works best for a variety of boards.
No two boards are configured exactly alike in terms of board member roles, as those roles often vary depending upon the board’s size, the type of industry the board governs, and the board member titles and responsibilities. However, when we examine board member roles through a wider lens, some common trends start to emerge for boards everywhere.
What is the main function of the board of directors? Each board carries a fiduciary responsibility for:
- Duty of Care: Ensuring all assets are used prudently.
- Duty of Loyalty: Ensuring all decisions are made in the best interests of the organization and help it move closer to its mission.
- Duty of Obedience: Ensuring the organization abides by all laws and regulations, as well as its own bylaws.
A board of directors governs many types of organizations, including publicly traded companies, nonprofits, financial institutions, colleges and universities, professional associations, and others. No matter the industry or profession, every board of directors is responsible for:
- Strategic governance and oversight
- Serving the organization’s stakeholders
- Managing budgets
- Setting policies
- Overseeing personnel
- Setting goals
- Measuring goals and achievements
While similar on many fronts, boards also deal with their own unique issues and concerns. Basically, boards that govern for-profit corporations or financial institutions must be responsible to anyone affected by its services, and nonprofits, universities, and professional organizations must be responsible to the local communities they serve.
Compliance and regulatory requirements for boards also vary widely by industry. For example, public corporations are bound by the U.S. Securities and Exchange Commission (SEC) rules and requirements. Health care organizations, on the other hand, must make HIPAA compliance a top priority.
Board Member Roles in a Nonprofit vs. For-Profit World
Most board of directors requirements involve much more than simply showing up to board meetings. The people you choose for your board must also understand governance, think strategically, and lead by example.
The National Council of Nonprofits lists the following as common board member responsibilities:
- Improving the organization’s strategic focus and effectiveness
- Shaping the organization’s culture
- Determining CEO compensation
- Addressing conflicts of interest
According to research conducted by OnBoard, basic responsibilities common across all nonprofit boards include:
- Establishing the mission and vision of the organization
- Hiring the executive director of the organization and overseeing their performance
- Working with staff members to develop short- and long-term plans
- Ensuring the organization’s programs and services are effective
- Helping to secure operating funds so the organization can continue to fulfill its mission
- Reviewing and approving major gifts, as well as the terms associated with those gifts
- Reviewing and approving the budget and providing ongoing financial oversight
- Ensuring the organization meets all legal and ethical obligations
- Maximizing the support of the community
- Regularly attending board meetings and committee meetings
- Recruiting new board members who meet the needs of the board and the organization
The National Association of Corporate Directors (NACD) boasts a comprehensive list of board roles, including:
- Clearly defining the independent director as a non-management director, free of any material, business, or professional relationship with management.
- Specifying the positions of Board Chair and CEO remain separate.
- Chair must be elected by full board, and typically limited to one three-year term
- Vice Chair must be elected by the full board as successor to the Chair at the end of Chair’s second year of service.
- The board elects independent directors recommended by its Nominating & Governance Committee.
- Independent directors must be individuals who demonstrate a commitment to the mission of the organization.
Specific Board Roles Individual Members Take
The structure of board roles may vary from one organization to the next, but most break down into the following board of director responsibilities:
Board Chair: Frequently referred to as Board President, this person works closely with the organization’s leaders and management to ensure the organization’s mission and goals meet the highest standards and are carried out to everyone’s satisfaction. The Board Chair is also responsible for setting agendas, conducting board meetings, hiring and overseeing the CEO, creating committees, and appointing committee chairs.
Dr. Randall S. Peterson, Professor of Organizational Behavior at London Business School, offers the following tips for what makes a great board chair:
- Fostering a culture that’s truly inclusive, where people feel like they belong.
- Creating an atmosphere where multiple voices are heard, and opinions are valued.
- Developing leadership skills, such as emotional intelligence, patience, and diplomacy.
- Modeling the values they wish to encourage in their team.
- Becoming digitally aware to modernize the board-meeting process.
- Establishing trust through managed conflict and effective decision-making.
- Listening more than you speak, and remaining open-minded to new ideas.
Vice President: Also referred to as the Vice Chair, the person serving in this role serves as second-in-command and keeps abreast of all board activities, so they’re ready to step in as Board President when the need arises. They also take on special projects assigned by the Board Chair, such as leading the important Nominating and Governance Committee. Vice Presidents are typically groomed to be the Chair’s successor near the end of the Chair’s term.
Secretary: This person handles the many tasks involved to ensure board meetings (and boards in general) remain effective and efficient. This includes providing meeting notices, preparing agendas, and taking minutes during board meetings, then distributing the approved minutes to the entire board.
In addition, a board’s secretary prepares and maintains various board records needed for audit compliance, historical reference, and other regulatory requirements.
Treasurer: This person monitors finances, prepares the organization’s budget, and typically oversees the board’s finance committee.
Committee Chair: Boards often appoint various committees to dive deeper into different initiatives for the organization. A Committee Chair leads the committee, sets the agenda for committee meetings, and reports information gleaned back to the full board.
Director: Individual board members fulfill director roles on a board. Their responsibilities typically fall under the umbrella of a fiduciary or legal advisor — or providing sound, ethical, and legal governance and financial management policies. They’re also tasked with fundraising and advocating for the organization.
No matter which role your board directors serve in, look for engaged individuals who embrace change, want to learn new technology, and show a willingness to consider other ideas. A more diverse board with a varied set of professional experiences, age ranges, and economic backgrounds can help you serve your community in more impactful ways.
How Board Management Software Helps Improve the Board Role
The right digital board portal can help directors, administrators, and other board members save time and significantly improve their overall effectiveness and efficiency.
With the OnBoard platform, board members gain real-time access to board agendas, important board materials, and other meeting resources, so everyone arrives informed and prepared to get down to your board’s business.
What Changed for Boards in 2021?
About The Author
- Josh Palmer serves as OnBoard's Head of Content. An experienced content creator, his previous roles have spanned numerous industries including B2C and B2B home improvement, healthcare, and software-as-a-service (SaaS). An Indianapolis native and graduate of Indiana University, Palmer currently resides in Fishers, Ind.
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