Difference between revisions of "Governance"

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A nonprofit board of directors is responsible for defining the organization’s mission and for providing overall leadership and strategic direction to the organization. A nonprofit board actively sets policy and ensures that the organization has adequate resources to carry out its mission. The board provides direct oversight and direction for the executive director and is responsible for evaluating his/her performance. A nonprofit board also has a responsibility to evaluate its own effectiveness, in upholding the public interest(s) served by the organization.   
 
A nonprofit board of directors is responsible for defining the organization’s mission and for providing overall leadership and strategic direction to the organization. A nonprofit board actively sets policy and ensures that the organization has adequate resources to carry out its mission. The board provides direct oversight and direction for the executive director and is responsible for evaluating his/her performance. A nonprofit board also has a responsibility to evaluate its own effectiveness, in upholding the public interest(s) served by the organization.   
  
−
==Duty of Care==
+
=Assessment Items=
−
The duty of care describes the level of competence that is expected of a board member, and is commonly expressed as the level of "care that an ordinarily prudent person would exercise in a like position and under similar circumstances." This means that a board member owes the duty to exercise reasonable care when he or she makes a decision as a steward of the organization.
+
<section begin=Assessment Items />
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+
===Board Composition & Roles===
−
==Duty of Loyalty==
+
<section begin=Board Composition & Roles />
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The duty of loyalty is a standard of faithfulness; a board member must give undivided allegiance when making decisions affecting the organization. This means that a board member can never use information obtained as a member for personal gain, but must act in the best interests of the organization.
+
−
 
+
−
==Duty of Obedience==
+
−
The duty of obedience requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission.
+
−
 
+
−
==Infrastructure Checklist==
+
−
<section begin=infrastructure />
+
−
===Required===
+
−
<section begin=infrastructure_required />
+
 
{| class="wikitable"
 
{| class="wikitable"
 
|-
 
|-
−
!  
+
!
−
! Yes
+
! Legal
−
! No
+
! Essential
−
! In Progress
+
! Recommended
−
! Not Applicable
+
−
! Not Sure
+
  
 
|-
 
|-
−
| [[Sarbanes-Oxley Act of 2002 | Conflict of interest policy]], procedures & signed forms for board, staff, & volunteers—updated annually ([[Sarbanes-Oxley Act of 2002]]; [[IRS Form 990 | 990]]) <span style="color:#c40606">'''US'''</span>
+
|We have the required number of board members (3 in NE, 1 in IA). '''[Legal NE, IA]'''
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
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| [[IRS Form 1023]] & IRS determination letter—publicly accessible for accountability purposes <span style="color:#c40606">'''US'''</span>
+
|We have all required officers (president, secretary, treasurer, or as indicated in bylaws). '''[Legal NE, IA]'''  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| [[Articles of Incorporation | Articles of incorporation]] (Neb. Rev. Stat. [https://nebraskalegislature.gov/laws/statutes.php?statute=21-1921 §21-1921], [http://www.legislature.ne.gov/laws/statutes.php?statute=21-1922 §21-1922]; Iowa Code [https://www.legis.iowa.gov/docs/code/504.202.pdf §504.202]) <span style="color:#c40606">'''NE, IA'''</span>
+
|At least two-thirds of the board is independent, as defined by the IRS. '''[Legal US]'''
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| Establish within 60 days and continuously maintain a [http://en.wikipedia.org/wiki/Registered_agent registered office and registered agent] (Neb. Rev. Stat. [http://statutes.laws.com/nebraska/Chapter21/21-1934 §21-1934], [http://statutes.laws.com/nebraska/Chapter21/21-1935 §21-1935], [http://statutes.laws.com/nebraska/Chapter21/21-1937 §21-1937]; Iowa Code [http://coolice.legis.iowa.gov/Cool-ICE/default.asp?category=billinfo&service=IowaCode&ga=83&input=504.501 §504.501]; Iowa Code [http://coolice.legis.iowa.gov/Cool-ICE/default.asp?category=billinfo&service=IowaCode&ga=83&input=504.1421 §504.1421]) <span style="color:#c40606">'''NE, IA'''</span>
+
|We have board representation that reflects the diversity of those we serve and aspire to serve.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| File [[Biennial Report|biennial report]] (by April 1st, in odd years) with Secretary of State (Neb. Rev. Stat. [[Biennial Report| §21-125]]; Iowa Code [[Biennial Report|§504.1613]]) <span style="color:#c40606">'''NE, IA''' </span>
+
|The board has no more than one employee (typically the chief executive) serving on the board, and he/she does not serve as the chair, vice-chair, secretary or treasurer.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| Hold an organizational meeting after incorporation to elect directors (if not named in the articles) appoint officers, adopt bylaws, and carry on other business (Neb. Rev. Stat. [http://nebraskalegislature.gov/laws/statutes.php?statute=21-1924&print=true §21-1924]; Iowa Code [http://coolice.legis.iowa.gov/Cool-ICE/default.asp?category=billinfo&service=IowaCode&ga=83&input=504.205 §504.205]) <span style="color:#c40606">'''NE, IA'''</span>
+
|The board includes members with the diverse skills, expertise and experience necessary to fulfill all needed board roles, including at least one person with financial expertise.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| Required officers—president, secretary and treasurer, or as indicated in bylaws (Neb. Rev. Stat. [http://www.legislature.ne.gov/laws/statutes.php?statute=21-1990 §21-1990]; Iowa Code [http://coolice.legis.iowa.gov/Cool-ICE/default.asp?category=billinfo&service=IowaCode&ga=83&input=504.841 §504.841]) <span style="color:#c40606">'''NE, IA'''</span>
+
|The board assumes responsibility and accountability for healthy functioning, diversity of thought and representation, and culture.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| Minimum of three board members (Neb. Rev. Stat. [http://www.legislature.ne.gov/laws/statutes.php?statute=21-1970 §21-1970]) <span style="color:#c40606">'''NE'''</span>
+
|Board members are provided with clear job descriptions and understand their roles and responsibilities.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
−
|
+
 
|-
 
|-
−
| Notify NE Secretary of State if registered agent or registered office has been changed or discontinued within 120 days (Neb. Rev. Stat. [http://statutes.laws.com/nebraska/Chapter21/21-19_137 §21-19,137]) <span style="color:#c40606">'''NE'''</span>
+
|Committee members are provided with clear job descriptions and understand their roles and responsibilities.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
−
|
+
 
|-
 
|-
−
| Minimum of one board member (Iowa Code [http://coolice.legis.iowa.gov/Cool-ICE/default.asp?category=billinfo&service=IowaCode&ga=83&input=504.803  §504.803]) <span style="color:#c40606">'''IA'''</span>
+
|}
−
|
+
<section end=Board Composition & Roles />
−
|
+
===Board Independence===
−
|
+
<section begin=Board Independence />
−
|
+
{| class="wikitable"
−
|
+
|-
 +
!
 +
! Legal
 +
! Essential
 +
! Recommended
 +
 
 
|-
 
|-
−
| Notify IA Secretary of State if registered agent or registered office has been changed or discontinued within 60 days (Iowa Code [http://coolice.legis.iowa.gov/Cool-ICE/default.asp?category=billinfo&service=IowaCode&ga=83&input=504.1421 §504.1421]) <span style="color:#c40606">'''IA'''</span>
+
|For the staffed nonprofit, board members do not manage the day-to-day affairs of the nonprofit. Where board members might individually fulfill direct service roles, we establish clear boundaries between their volunteer/direct mission fulfillment role and their role as a member of a collective decision-making governing body.
−
|
+
|style="width:80px" |
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |
−
|
+
|-
−
|
+
|Each board member discloses all material facts and relationships and refrains from voting on any matter where there is a conflict of interest.
 +
|style="width:80px" |
 +
|style="width:80px; text-align:center" | X
 +
|style="width:80px" |  
 +
|-
 +
|Board members (who are not employees) receive no monetary compensation from the organization.
 +
|style="width:80px" |
 +
|style="width:80px; text-align:center" | X
 +
|style="width:80px" |  
 
|-
 
|-
−
| Articles of incorporation must include provisions not inconsistent with law for how assets will be distributed in case of corporate dissolution (Neb. Rev. Stat. [http://statutes.laws.com/nebraska/Chapter21/21-19217 §21-1921], [http://statutes.laws.com/nebraska/Chapter21/21-1922 §21-1922]; Iowa Code [http://coolice.legis.iowa.gov/Cool-ICE/default.asp?category=billinfo&service=IowaCode&ga=83&input=504.202 §504.202]) <span style="color:#c40606">'''NE, IA (required for IA corporations incorporated after January 1, 2005; recommended for all others)'''</span>
 
−
|
 
−
|
 
−
|
 
−
|
 
−
|
 
 
|}
 
|}
−
<section end=infrastructure_required />
+
<section end=Board Independence />
−
 
+
===Board Oversight===
−
===Strongly Recommended===
+
<section begin=Board Oversight />
−
<section begin=infrastructure_strongly_recommended />
+
 
{| class="wikitable"
 
{| class="wikitable"
 
|-
 
|-
−
!  
+
!
−
! Yes
+
! Legal
−
! No
+
! Essential
−
! In Progress
+
! Recommended
−
! Not Applicable
+
−
! Not Sure
+
  
 
|-
 
|-
−
| [[Code of Ethics & Conduct | Board code of ethics/conduct]]
+
|The board conducts an annual performance review of the chief executive. The chief executive's performance assessment is based on organizational accomplishments and the total compensation package reflects his/her performance as well as industry standards.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| [[Board Member Reimbursement & Compensation | Board member reimbursement/compensation policy]]
+
|Board members make decisions in the best interest of the organization and not in the interest of another entity, including themselves.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| [[Board Resolution & Minutes Book | Board resolutions/minutes book]]
+
|The board reviews and approves new or revised fiscal and governance policies.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| [[Bylaws | Bylaws include board liability & indemnification language]]
+
|The board annually reviews and approves the budget.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| [[Liability Insurances | Liability insurances]] (Director & Officer, general, volunteer, etc.)
+
|The board or appointed finance committee reviews financial reports quarterly, at a minimum, and monthly if possible.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| [[Board Voting Procedures | Voting procedures]]
+
|Board members are given the opportunity to review and approve the 990 prior to submission, as well as any other federal, state or local filings.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |
−
|
+
−
|
+
−
|}
+
−
<section end=infrastructure_strongly_recommended />
+
−
 
+
−
===Recommended===
+
−
<section begin=infrastructure_recommended />
+
−
{| class="wikitable"
+
 
|-
 
|-
−
!
+
|The board actively participates in and approves the organizations strategic plan.
−
! Yes
+
|style="width:80px" |
−
! No
+
|style="width:80px; text-align:center" | X
−
! In Progress
+
|style="width:80px" |
−
! Not Applicable
+
−
! Not Sure
+
−
 
+
 
|-
 
|-
−
| [[Annual Report | Annual report]]
+
|At a minimum of every two years, the board reviews the organizations bylaws, mission statement, articles of incorporation, and corporate policies and amends them as needed to reflect organizational growth and development.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| [[Board Development | Board attendance policy]]
+
|The board conducts an annual evaluation of itself.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
−
|
+
 
|-
 
|-
−
| [[Board Development | Board calendar]] (meetings & organizational events)
+
|The board has a succession plan for the chief executive, board members, and key staff.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
−
|
+
 
|-
 
|-
−
| [[Board Development | Board giving policy]] (100% of board members should give)
+
|The board has an organizational transition plan to maintain daily operations during a change in executive or board leadership.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
−
|
+
 
|-
 
|-
−
| [[Board Development | Board member handbook]]—policies & procedures including, but not limited to:
+
|}
−
* [[Lobbying|Advocacy & lobbying]]
+
<section end=Board Oversight />
−
* [[Board Development | Attendance & dismissal]]
+
===Board Policies & Procedures===
−
* [[Audits | Audit process]] & auditor selection
+
<section begin=Board Policies & Procedures />
−
* [[Board Development | Board responsibilities/expectations/job descriptions]]
+
{| class="wikitable"
−
* [[Board Development | Board transition]] (term limits, recruitment, selection)
+
−
* Committees (purpose, structure, goals, activities)
+
−
* [[Sarbanes-Oxley Act of 2002 | Conflict of interest policy]]
+
−
* [[Crisis Management Plan | Crisis communication plan]]
+
−
* [[Succession Planning | Executive transition]] (emergency & planned)
+
−
* [[Board Development | Orientation, training & evaluation]]
+
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| [[Board Development | Board member recruitment, selection, orientation, training plans]]
+
!
−
|
+
! Legal
−
|
+
! Essential
−
|
+
! Recommended
−
|
+
 
−
|
+
 
|-
 
|-
−
| [http://www.councilofnonprofits.org/resources/resources-topic/boards-governance/board-member-self-assessment Board self-assessment plan & forms]
+
|We have an up-to-date conflict of interest policy and signed disclosure forms for the board, staff, and volunteers. '''[Legal US]'''
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| [[Board Development | Board terms, rotation & removal]] (bylaws)
+
|We held an organizational meeting after incorporation to elect directors (if not named in the articles of incorporation), appoint officers and adopt bylaws. '''[Legal NE, IA]'''
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| Chief executive hiring & assessment/evaluation plan
+
|We keep as permanent records all financial information for the organization.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| Committee charter(s)
+
|We have a clear policy on board member term limits, rotation (term staggering), number of consecutive terms, and removal written in our bylaws, and we abide by these.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| Committee descriptions (purpose, structure, goals, activities, person responsible)
+
|Board meetings are held at least quarterly, and regular attendance is required.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| Committee policy handbooks
+
|The board follows the voting procedures as defined in the bylaws.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| Compensation documentation (executive & other staff) Note:  See IRS information on “rebuttable presumption” for more details on what to have.
+
|We educate the board and staff about what constitutes conflict of interest.
−
*http://www.irs.gov/charities/charitable/article/0,,id=173697,00.html
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| Disaster recovery plan
+
|We keep minutes of all board meetings and documentation of any actions taken by the board without a meeting as permanent records.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| Executive evaluation plan
+
|All board members receive relevant financial literacy, fundraising, legal, lobbying and advocacy training as needed.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
−
|
+
 
|-
 
|-
−
| [[Succession Planning | Leadership succession & transition plan]] (including board & staff leadership)
+
|Board members are provided with an orientation and board manual.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
−
|
+
 
|-
 
|-
−
| Organizational chart
+
|We have an up-to-date board calendar with meetings and organizational events.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
−
|
+
 
|-
 
|-
−
| [[Human Resources: Compensation | Process for determining chief executive compensation]]
 
−
|
 
−
|
 
−
|
 
−
|
 
−
|
 
−
|-
 
−
| Risk evaluation & management systems
 
−
|
 
−
|
 
−
|
 
−
|
 
−
|
 
 
|}
 
|}
−
<section end=infrastructure_recommended />
+
<section end=Board Policies & Procedures />
−
<section end=infrastructure />
+
===Documents===
−
 
+
<section begin=Documents />
−
==Practices Assessment==
+
−
<section begin=assessment />
+
−
===Board Composition & Roles===
+
 
{| class="wikitable"
 
{| class="wikitable"
 
|-
 
|-
−
!  
+
!
−
! No/Not Begun
+
! Legal
−
! In Process
+
! Essential
−
! Yes/ Complete
+
! Recommended
−
! Not Applicable
+
−
! Not Sure
+
  
 
|-
 
|-
−
| We have the required number of board members (3 in NE, 1 in IA). <span style="color:#c40606">'''NE, IA'''</span>
+
|We have our IRS determination letter. '''[Legal US]'''
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| We have all required officers (president, secretary, treasurer, or as indicated in [[Bylaws|bylaws]]). <span style="color:#c40606">'''NE, IA'''</span>
+
|We have up-to-date articles of incorporation. '''[Legal NE, IA]'''
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| At least two-thirds of the board is independent, as defined by the IRS. <span style="color:#c40606">'''US'''</span>
+
|We have an up-to-date registered agent and registered office filing with the Secretary of State. '''[Legal NE, IA]'''
−
 
+
|style="width:80px; text-align:center" | X
−
A '''trustee''' is not an “independent trustee” if, at any time during the fiscal year, the trustee: (a) received compensation as an officer or employee from the corporation or a related organization; (b) received compen¬sation or other payments as an independent contractor of $10,000 or more not including expense reimbursement or payment for services as a director; or (c) became involved or had a family member who became involved in a “reportable transaction” with the corporation, whether directly or indirectly through affiliation with another organization.
+
|style="width:80px" |  
−
 
+
|style="width:80px" |  
−
Generally speaking, '''reportable transactions''' include:  
+
−
# loans or grants to the director (or the director’s family members or entities in which the director or family members have an ownership interest, collectively “related persons”);
+
−
# compensation to a family member of $10,000 or more; or
+
−
# a business transaction with the director or related persons that exceeds the greater of $10,000 or 1 percent of the organization’s annual revenues, or multiple transactions that exceed in the aggregate $100,000 during the fiscal year.
+
−
 
+
−
Comply with the IRS definition of independence when filing the Form 990, but remember that independence means more—it takes into account financial and non-financial relationships that could lead a reasonable person to question an individual’s objectivity and loyalty to the organization.
+
−
 
+
−
The gold standard for independence should be that the board is beyond reproach, in fact and appearance.
+
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| The board has no more than one employee (typically the chief executive) serving on the board, and he/she does not serve as the chair, vice-chair, secretary or treasurer.
+
|We file a biennial report with the Secretary of State. '''[Legal NE, IA]'''
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| We have an established process to recruit and select new board members that ensures board members represent the best interests of the organization, the infusion of new ideas and community perspectives, and the preservation of institutional memory via staggered terms and term limits.
+
|We have up-to-date bylaws which include board liability & indemnification language.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| The board includes members with the diverse skills, expertise and experience necessary to fulfill all needed board roles, including at least one person with financial expertise.
+
|We carry the appropriate level of liability insurance, including Director & Officer insurance.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| We strive to have board representation that reflects the diversity of our community and constituency.
+
|Our board has at least five persons, unrelated to each other or to staff, to ensure appropriate deliberation and diversity.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
|style="width:80px" |  
−
|
+
−
|
+
 
|-
 
|-
−
| The board is comprised of individuals who represent the best interests of the organization.
+
|We have an up-to-date committee handbook with each committee’s charter (or other clear statement of authority and purpose), policies and procedures.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
−
|
+
 
|-
 
|-
−
| Board members are provided with clear job descriptions and understand their roles and responsibilities.
+
|We have an up-to-date board member policies and procedures handbook.
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px" |  
−
|
+
|style="width:80px; text-align:center" | X
−
|
+
−
|
+
 
|-
 
|-
−
| Committee members are provided with clear job descriptions and understand their roles and responsibilities.
 
−
|
 
−
|
 
−
|
 
−
|
 
−
|
 
 
|}
 
|}
 +
<section end=Documents />
 +
<section end=Resources />
  
−
===Governance Documents===
+
=Resources=
 +
<section begin=Resources />
 
{| class="wikitable"
 
{| class="wikitable"
 
|-
 
|-
−
!
+
| [[Sarbanes-Oxley Act of 2002 | Conflict of interest policy]], procedures & signed forms for board, staff, & volunteers—updated annually ([[Sarbanes-Oxley Act of 2002]]; [[IRS Form 990 | 990]]) <span style="color:#c40606">'''US'''</span>
−
! No/Not Begun
+
−
! In Process
+
−
! Yes/ Complete
+
−
! Not Applicable
+
−
! Not Sure
+
−
 
+
 
|-
 
|-
−
| We have our IRS determination letter.  <span style="color:#c40606">'''US'''</span>
+
| [[IRS Form 1023]] & IRS determination letter—publicly accessible for accountability purposes <span style="color:#c40606">'''US'''</span>
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We have up-to-date articles of incorporation. <span style="color:#c40606">'''NE, IA'''</span>
+
| [[Articles of Incorporation | Articles of incorporation]] (Neb. Rev. Stat. [https://nebraskalegislature.gov/laws/statutes.php?statute=21-1921 §21-1921]; Iowa Code [https://www.legis.iowa.gov/docs/code/504.202.pdf §504.202]) <span style="color:#c40606">'''NE, IA'''</span>
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We have an up-to-date registered agent and registered office filing with the Secretary of State. <span style="color:#c40606">'''NE, IA'''</span>
+
| Establish within 60 days and continuously maintain a [http://en.wikipedia.org/wiki/Registered_agent registered office and registered agent] (Neb. Rev. Stat. [http://statutes.laws.com/nebraska/Chapter21/21-1934 §21-1934], [http://statutes.laws.com/nebraska/Chapter21/21-1935 §21-1935], [http://statutes.laws.com/nebraska/Chapter21/21-1937 §21-1937]; Iowa Code [] <span style="color:#c40606">'''NE, IA'''</span>
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We file a biennial report with the Secretary of State. <span style="color:#c40606">'''NE, IA'''</span>
+
| File [[Biennial Report|biennial report]] (by April 1st, in odd years) with Secretary of State (Neb. Rev. Stat. [[Biennial Report| §21-125]]; Iowa Code [[Biennial Report|§504.1613]]) <span style="color:#c40606">'''NE, IA''' </span>
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We have up-to-date bylaws which include board liability & indemnification language.
+
| Hold an organizational meeting after incorporation to elect directors (if not named in the articles) appoint officers, adopt bylaws, and carry on other business (Neb. Rev. Stat. [https://casetext.com/statute/revised-statutes-of-nebraska/chapter-21-corporations-and-other-companies/21-1924-organization-of-corporation §21-1924]; Iowa Code [https://www.lawserver.com/law/state/iowa/ia-code/iowa_code_504-205 §504.205]) <span style="color:#c40606">'''NE, IA'''</span>
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We have a code of ethics and conduct for the board.
+
| Required officers—president, secretary and treasurer, or as indicated in bylaws (Neb. Rev. Stat. [https://casetext.com/statute/revised-statutes-of-nebraska/chapter-21-corporations-and-other-companies/21-1990-required-officers §21-1990]; Iowa Code [https://www.legis.iowa.gov/docs/code/504.841.pdf §504.841]) <span style="color:#c40606">'''NE, IA'''</span>
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We have an up-to-date board member policies and procedures handbook.
+
| Minimum of three board members (Neb. Rev. Stat. [https://nebraskalegislature.gov/laws/statutes.php?statute=21-1970 §21-1970]) <span style="color:#c40606">'''NE'''</span>
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We have an up-to-date committee handbook with each committee’s charter (or other clear statement of authority and purpose), policies and procedures.
+
| Notify NE Secretary of State if registered agent or registered office has been changed or discontinued within 120 days (Neb. Rev. Stat. [http://statutes.laws.com/nebraska/Chapter21/21-19_137 §21-19,137]) <span style="color:#c40606">'''NE'''</span>
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We carry the appropriate level of liability insurance, including Director & Officer insurance.
+
| Minimum of one board member (Iowa Code [https://law.justia.com/codes/iowa/2009/title-12/subtitle-5/chapter-504/504-803/  §504.803]) <span style="color:#c40606">'''IA'''</span>
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
−
|}
+
−
 
+
−
===Board Policies & Procedures===
+
−
{| class="wikitable"
+
 
|-
 
|-
−
!
+
| Notify IA Secretary of State if registered agent or registered office has been changed or discontinued within 60 days (Iowa Code [https://law.justia.com/codes/iowa/2016/title-xii/chapter-504/section-504.1421 §504.1421]) <span style="color:#c40606">'''IA'''</span>
−
! No/Not Begun
+
−
! In Process
+
−
! Yes/ Complete
+
−
! Not Applicable
+
−
! Not Sure
+
−
 
+
 
|-
 
|-
−
| We have an up-to-date conflict of interest policy and signed disclosure forms for the board, staff, and volunteers. <span style="color:#c40606">'''US'''</span>
+
| Articles of incorporation must include provisions not inconsistent with law for how assets will be distributed in case of corporate dissolution (Neb. Rev. Stat. [https://nebraskalegislature.gov/laws/statutes.php?statute=21-1921 §21-1921], [http://statutes.laws.com/nebraska/Chapter21/21-1922 §21-1922]; Iowa Code [https://www.legis.iowa.gov/docs/code/504.202.pdf §504.202]) <span style="color:#c40606">'''NE, IA (required for IA corporations incorporated after January 1, 2005; recommended for all others)'''</span>
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We held an organizational meeting after incorporation to elect directors (if not named in the articles of incorporation), appoint officers and adopt bylaws.  <span style="color:#c40606">'''NE, IA'''</span>
+
| [[Code of Ethics & Conduct | Board code of ethics/conduct]]
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We have a clear policy on board member term limits, rotation (term staggering), number of consecutive terms, and removal written in our bylaws, and we abide by these.
+
| [[Board Member Reimbursement & Compensation | Board member reimbursement/compensation policy]]
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| Board meetings are held at least quarterly, and regular attendance is required.
+
| [[Board Resolution & Minutes Book | Board resolutions/minutes book]]
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We have a board attendance policy and abide by it.
+
| [[Bylaws | Bylaws include board liability & indemnification language]]
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| The board follows the voting procedures as defined in the bylaws.
+
| [[Liability Insurances | Liability insurances]] (Director & Officer, general, volunteer, etc.)
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| Board members are provided with an orientation and board manual.
+
| [[Board Voting Procedures | Voting procedures]]
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We have an up-to-date board calendar with meetings and organizational events.
+
| [[Annual Report | Annual report]]
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We educate the board and staff about what constitutes conflict of interest.
+
| [[Board Development | Board attendance policy]]
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We regularly and consistently monitor and enforce the conflict of interest policy.
+
| [[Board Development | Board calendar]] (meetings & organizational events)
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| All board members receive relevant financial literacy, legal, lobbying and advocacy training as needed.
+
| [[Board Development | Board giving policy]] (100% of board members should give)
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We have a process for educating board members to ensure they can carry out their oversight, fundraising and independence responsibilities.
+
| [[Board Development | Board member handbook]]—policies & procedures including, but not limited to:
−
|
+
* [[Lobbying|Advocacy & lobbying]]
−
|
+
* [[Board Development | Attendance & dismissal]]
−
|
+
* [[Audits | Audit process]] & auditor selection
−
|
+
* [[Board Development | Board responsibilities/expectations/job descriptions]]
−
|
+
* [[Board Development | Board transition]] (term limits, recruitment, selection)
 +
* Committees (purpose, structure, goals, activities)
 +
* [[Sarbanes-Oxley Act of 2002 | Conflict of interest policy]]
 +
* [[Crisis Management Plan | Crisis communication plan]]
 +
* [[Succession Planning | Executive transition]] (emergency & planned)
 +
* [[Board Development | Orientation, training & evaluation]]
 
|-
 
|-
−
| We keep as permanent records minutes of all board meetings and documentation of any actions taken by the board without a meeting.
+
| [[Board Development | Board member recruitment, selection, orientation, training plans]]
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We keep as permanent records all financial information for the organization.
+
| [http://www.councilofnonprofits.org/resources/resources-topic/boards-governance/board-member-self-assessment Board self-assessment plan & forms]
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| We strictly prohibit financial loans to members of the board or to personnel.
+
| [[Board Development | Board terms, rotation & removal]] (bylaws)
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
−
|-
+
−
|We abide by state law if/when the board takes action without a meeting. [http://www.serve.nebraska.gov/pdf/resources/Nebraska%20Nonprofit%20Corporation%20Act%202007%20DED.pdf NE, 21-1981], [https://www.legis.iowa.gov/docs/code/2011/504.pdf IA, 504.822]
+
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
−
|}
+
−
 
+
−
===Board Responsibilities: Oversight===
+
−
{| class="wikitable"
+
 
|-
 
|-
−
!
+
| Chief executive hiring & assessment/evaluation plan
−
! No/Not Begun
+
−
! In Process
+
−
! Yes/ Complete
+
−
! Not Applicable
+
−
! Not Sure
+
−
 
+
 
|-
 
|-
−
| The board conducts an annual evaluation of itself.
+
| Committee charter(s)
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| Periodically, the board reviews its size, composition and operational structure.
+
| Committee descriptions (purpose, structure, goals, activities, person responsible)
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| At a minimum of every two years, the board reviews the organization’s bylaws, mission statement, articles of incorporation and corporate policies and amends them as needed to reflect organizational growth and development.
+
| Committee policy handbooks
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| The board actively participates in and approves the organization’s strategic plan.
+
| Compensation documentation (executive & other staff) Note:  See IRS information on “rebuttable presumption” for more details on what to have.
−
|
+
*https://www.irs.gov/charities-non-profits/charitable-organizations/rebuttable-presumption-intermediate-sanctions
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| The board conducts an annual performance review of the chief executive. The chief executive’s performance assessment is based on organizational accomplishments, and the total compensation package is reasonable, reflecting his/her performance as well as industry standards.
+
| Disaster recovery plan
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| The board has a succession plan for the chief executive, board members and key staff.
+
| Executive evaluation plan
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| The board has an organizational transition plan to maintain daily operations during a change in executive or board leadership.
+
| [[Succession Planning | Leadership succession & transition plan]] (including board & staff leadership)
−
We have a crisis communication plan written in the board manual.
+
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
−
|}
+
−
 
+
−
===Board Responsibilities: Fundraising & Development===
+
−
{| class="wikitable"
+
 
|-
 
|-
−
!
+
| Organizational chart
−
! No/Not Begun
+
−
! In Process
+
−
! Yes/ Complete
+
−
! Not Applicable
+
−
! Not Sure
+
−
 
+
 
|-
 
|-
−
| All board members make personal financial contributions to the organization.
+
| [[Human Resources: Compensation | Process for determining chief executive compensation]]
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|-
 
|-
−
| Board members volunteer their time and raise funds from external sources.
+
| Risk evaluation & management systems
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
−
|-
+
−
| Board members are provided with fundraising training and support materials.
+
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
−
|-
+
−
| We provide training and education so that board members can advocate for the organization.
+
−
|
+
−
|
+
−
|
+
−
|
+
−
|
+
 
|}
 
|}
 +
<section end=Resources />
  
 +
=Best Practices=
 +
'''Board Composition & Roles'''
 +
*Review the organization’s process for recruiting and screening potential board members. Develop a script of topics to cover during an initial meeting, including the ethics and values of the organization. Provide information on the organization’s values and ethics in a written format (i.e. board manual).
 +
*Strive for diversity on your board to bring in fresh/alternative perspectives and approaches to achieving your mission.
 +
*Establish term limits for board members. Staggered terms should maintain at least a 50% incumbency rate to maintain continuity and organizational identity.
 +
*Frame board orientations around the mission. Lay out specific expectations of how board members will help achieve the mission; encourage the board chair to frame all board discussions around the mission; consider a board retreat with a specific mission focus; and provide each board member with a position description developed within the context of mission achievement.
 +
*Board members should not manage day-to-day work of the organization. Instead, they delegate that function to others and exercise credible, reasonable, and prudent oversight without personal bias in respect to the officers, agents, and employees to whom tasks are delegated.
  
 +
'''Board Policies & Procedures'''
 +
*All board members should sign a Conflict of Interest statement, which should be updated on an annual basis to reflect any new affiliations and potential points of conflict. Once signed, the organization’s leadership needs to adhere to the Conflict of Interest Policy and understand the appropriate procedure to disclose a conflict.
 +
*To avoid potential conflict and confusion, your organization should consider a variety of operating policies beyond the bylaws. In addition to personnel policies, consider formal policies for technology use, confidentiality, conflict of interest, and customer grievance procedures.
 +
*Establish a transition plan to prepare for an immediate change in executive director: develop a process to select an interim executive and establish a strategy and timeline for posting the position, recruiting, screening, selecting, and orienting the new executive.
 +
*Must establish within 60 days and continuously maintain a registered office and registered agent (NE, IA), and notify the Secretary of State if registered office or agent has changed (within 120 days NE, within 60 days IA).
  
 +
=Board Roles and Responsibilities Defined=
 +
BoardSource [https://boardsource.org/fundamental-topics-of-nonprofit-board-service/roles-responsibilities/?utm_term=&utm_campaign=Topics&utm_source=adwords&utm_medium=ppc&hsa_net=adwords&hsa_tgt=dsa-275426390549&hsa_ad=198069365947&hsa_acc=2029445777&hsa_grp=41204826407&hsa_mt=b&hsa_cam=718908455&hsa_kw=&hsa_ver=3&hsa_src=g&gclid=Cj0KCQjwivbsBRDsARIsADyISJ_vOwLcnx9MlJVpNZc_so_KbrXRLCDNAVCW8Ttb6lEpfQvut67Z3LgaAqg7EALw_wcB Board Roles and Responsibilities]
 +
===Duty of Care===
 +
The duty of care describes the level of competence that is expected of a board member, and is commonly expressed as the level of "care that an ordinarily prudent person would exercise in a like position and under similar circumstances." This means that a board member owes the duty to exercise reasonable care when he or she makes a decision as a steward of the organization.
  
 +
===Duty of Loyalty===
 +
The duty of loyalty is a standard of faithfulness; a board member must give undivided allegiance when making decisions affecting the organization. This means that a board member can never use information obtained as a member for personal gain, but must act in the best interests of the organization.
  
−
===Board Responsibilities: Independence===
+
===Duty of Obedience===
−
{| class="wikitable"
+
The duty of obedience requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission.
−
|-
+
−
!
+
−
! No/Not Begun
+
−
! In Process
+
−
! Yes/ Complete
+
−
! Not Applicable
+
−
! Not Sure
+
−
 
+
−
|-
+
−
| Board members make decisions in the best interest of the organization and not in the interest of another entity, including themselves.
+
−
|
+
−
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| Each board member discloses all material facts and relationships and refrains from voting on any matter where there is a conflict of interest.
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==Walking the Talk==
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* Frame board orientations around the mission. Lay out specific expectations of how board members will help achieve the mission; encourage the board chair to frame all board discussions around the mission; consider a board retreat with a specific mission focus; and provide each board member with a position description developed within the context of mission achievement.
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* All board members should sign a Conflict of Interest statement, which should be updated on an annual basis to reflect any new affiliations and potential points of conflict. Once signed, the organization’s leadership needs to adhere to the Conflict of Interest Policy, and understand the appropriate procedure to disclose a conflict.
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* Review the organization’s process for recruiting and screening potential board members. Develop a script of topics to cover during an initial meeting, including the ethics and values of the organization. Provide information on the organization’s values and ethics in a written format (i.e. board manual).
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* To avoid potential conflict and confusion, your organization should consider a variety of operating policies beyond the bylaws. In addition to personnel policies, consider formal policies for technology use, confidentiality, conflict of interest, and customer grievance procedures.
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* Strive for diversity on your board to bring in fresh/alternative perspectives and approaches to achieving your mission.
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* Establish term limits for board members. Staggered terms should maintain at least a 50% incumbency rate to maintain continuity and organizational identity.
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* Establish a transition plan to prepare for an immediate change in executive director:  develop a process to select an interim executive and establish a strategy and timeline for posting the position, recruiting, screening, selecting, and orienting the new executive.
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* While each board must determine the appropriate budget needed to achieve its mission, various industry benchmarks provide target ranges of 65-80% of expenditures for programs, and 20-35% for administration, fundraising and evaluation.
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Latest revision as of 21:11, 9 October 2019

SEE ALSO: Ten Basic Responsibilities of Nonprofit Boards (Boardsource)

GovernanceWebinar2.jpg

A nonprofit board of directors is responsible for defining the organization’s mission and for providing overall leadership and strategic direction to the organization. A nonprofit board actively sets policy and ensures that the organization has adequate resources to carry out its mission. The board provides direct oversight and direction for the executive director and is responsible for evaluating his/her performance. A nonprofit board also has a responsibility to evaluate its own effectiveness, in upholding the public interest(s) served by the organization.

Assessment Items

Board Composition & Roles

Legal Essential Recommended
We have the required number of board members (3 in NE, 1 in IA). [Legal NE, IA] X
We have all required officers (president, secretary, treasurer, or as indicated in bylaws). [Legal NE, IA] X
At least two-thirds of the board is independent, as defined by the IRS. [Legal US] X
We have board representation that reflects the diversity of those we serve and aspire to serve. X
The board has no more than one employee (typically the chief executive) serving on the board, and he/she does not serve as the chair, vice-chair, secretary or treasurer. X
The board includes members with the diverse skills, expertise and experience necessary to fulfill all needed board roles, including at least one person with financial expertise. X
The board assumes responsibility and accountability for healthy functioning, diversity of thought and representation, and culture. X
Board members are provided with clear job descriptions and understand their roles and responsibilities. X
Committee members are provided with clear job descriptions and understand their roles and responsibilities. X

Board Independence

Legal Essential Recommended
For the staffed nonprofit, board members do not manage the day-to-day affairs of the nonprofit. Where board members might individually fulfill direct service roles, we establish clear boundaries between their volunteer/direct mission fulfillment role and their role as a member of a collective decision-making governing body. X
Each board member discloses all material facts and relationships and refrains from voting on any matter where there is a conflict of interest. X
Board members (who are not employees) receive no monetary compensation from the organization. X

Board Oversight

Legal Essential Recommended
The board conducts an annual performance review of the chief executive. The chief executive's performance assessment is based on organizational accomplishments and the total compensation package reflects his/her performance as well as industry standards. X
Board members make decisions in the best interest of the organization and not in the interest of another entity, including themselves. X
The board reviews and approves new or revised fiscal and governance policies. X
The board annually reviews and approves the budget. X
The board or appointed finance committee reviews financial reports quarterly, at a minimum, and monthly if possible. X
Board members are given the opportunity to review and approve the 990 prior to submission, as well as any other federal, state or local filings. X
The board actively participates in and approves the organizations strategic plan. X
At a minimum of every two years, the board reviews the organizations bylaws, mission statement, articles of incorporation, and corporate policies and amends them as needed to reflect organizational growth and development. X
The board conducts an annual evaluation of itself. X
The board has a succession plan for the chief executive, board members, and key staff. X
The board has an organizational transition plan to maintain daily operations during a change in executive or board leadership. X

Board Policies & Procedures

Legal Essential Recommended
We have an up-to-date conflict of interest policy and signed disclosure forms for the board, staff, and volunteers. [Legal US] X
We held an organizational meeting after incorporation to elect directors (if not named in the articles of incorporation), appoint officers and adopt bylaws. [Legal NE, IA] X
We keep as permanent records all financial information for the organization. X
We have a clear policy on board member term limits, rotation (term staggering), number of consecutive terms, and removal written in our bylaws, and we abide by these. X
Board meetings are held at least quarterly, and regular attendance is required. X
The board follows the voting procedures as defined in the bylaws. X
We educate the board and staff about what constitutes conflict of interest. X
We keep minutes of all board meetings and documentation of any actions taken by the board without a meeting as permanent records. X
All board members receive relevant financial literacy, fundraising, legal, lobbying and advocacy training as needed. X
Board members are provided with an orientation and board manual. X
We have an up-to-date board calendar with meetings and organizational events. X

Documents

Legal Essential Recommended
We have our IRS determination letter. [Legal US] X
We have up-to-date articles of incorporation. [Legal NE, IA] X
We have an up-to-date registered agent and registered office filing with the Secretary of State. [Legal NE, IA] X
We file a biennial report with the Secretary of State. [Legal NE, IA] X
We have up-to-date bylaws which include board liability & indemnification language. X
We carry the appropriate level of liability insurance, including Director & Officer insurance. X
Our board has at least five persons, unrelated to each other or to staff, to ensure appropriate deliberation and diversity. X
We have an up-to-date committee handbook with each committee’s charter (or other clear statement of authority and purpose), policies and procedures. X
We have an up-to-date board member policies and procedures handbook. X


Resources

Conflict of interest policy, procedures & signed forms for board, staff, & volunteers—updated annually (Sarbanes-Oxley Act of 2002; 990) US
IRS Form 1023 & IRS determination letter—publicly accessible for accountability purposes US
Articles of incorporation (Neb. Rev. Stat. §21-1921; Iowa Code §504.202) NE, IA
Establish within 60 days and continuously maintain a registered office and registered agent (Neb. Rev. Stat. §21-1934, §21-1935, §21-1937; Iowa Code [] NE, IA
File biennial report (by April 1st, in odd years) with Secretary of State (Neb. Rev. Stat. §21-125; Iowa Code §504.1613) NE, IA
Hold an organizational meeting after incorporation to elect directors (if not named in the articles) appoint officers, adopt bylaws, and carry on other business (Neb. Rev. Stat. §21-1924; Iowa Code §504.205) NE, IA
Required officers—president, secretary and treasurer, or as indicated in bylaws (Neb. Rev. Stat. §21-1990; Iowa Code §504.841) NE, IA
Minimum of three board members (Neb. Rev. Stat. §21-1970) NE
Notify NE Secretary of State if registered agent or registered office has been changed or discontinued within 120 days (Neb. Rev. Stat. §21-19,137) NE
Minimum of one board member (Iowa Code §504.803) IA
Notify IA Secretary of State if registered agent or registered office has been changed or discontinued within 60 days (Iowa Code §504.1421) IA
Articles of incorporation must include provisions not inconsistent with law for how assets will be distributed in case of corporate dissolution (Neb. Rev. Stat. §21-1921, §21-1922; Iowa Code §504.202) NE, IA (required for IA corporations incorporated after January 1, 2005; recommended for all others)
Board code of ethics/conduct
Board member reimbursement/compensation policy
Board resolutions/minutes book
Bylaws include board liability & indemnification language
Liability insurances (Director & Officer, general, volunteer, etc.)
Voting procedures
Annual report
Board attendance policy
Board calendar (meetings & organizational events)
Board giving policy (100% of board members should give)
Board member handbook—policies & procedures including, but not limited to:
Board member recruitment, selection, orientation, training plans
Board self-assessment plan & forms
Board terms, rotation & removal (bylaws)
Chief executive hiring & assessment/evaluation plan
Committee charter(s)
Committee descriptions (purpose, structure, goals, activities, person responsible)
Committee policy handbooks
Compensation documentation (executive & other staff) Note: See IRS information on “rebuttable presumption” for more details on what to have.
Disaster recovery plan
Executive evaluation plan
Leadership succession & transition plan (including board & staff leadership)
Organizational chart
Process for determining chief executive compensation
Risk evaluation & management systems


Best Practices

Board Composition & Roles

  • Review the organization’s process for recruiting and screening potential board members. Develop a script of topics to cover during an initial meeting, including the ethics and values of the organization. Provide information on the organization’s values and ethics in a written format (i.e. board manual).
  • Strive for diversity on your board to bring in fresh/alternative perspectives and approaches to achieving your mission.
  • Establish term limits for board members. Staggered terms should maintain at least a 50% incumbency rate to maintain continuity and organizational identity.
  • Frame board orientations around the mission. Lay out specific expectations of how board members will help achieve the mission; encourage the board chair to frame all board discussions around the mission; consider a board retreat with a specific mission focus; and provide each board member with a position description developed within the context of mission achievement.
  • Board members should not manage day-to-day work of the organization. Instead, they delegate that function to others and exercise credible, reasonable, and prudent oversight without personal bias in respect to the officers, agents, and employees to whom tasks are delegated.

Board Policies & Procedures

  • All board members should sign a Conflict of Interest statement, which should be updated on an annual basis to reflect any new affiliations and potential points of conflict. Once signed, the organization’s leadership needs to adhere to the Conflict of Interest Policy and understand the appropriate procedure to disclose a conflict.
  • To avoid potential conflict and confusion, your organization should consider a variety of operating policies beyond the bylaws. In addition to personnel policies, consider formal policies for technology use, confidentiality, conflict of interest, and customer grievance procedures.
  • Establish a transition plan to prepare for an immediate change in executive director: develop a process to select an interim executive and establish a strategy and timeline for posting the position, recruiting, screening, selecting, and orienting the new executive.
  • Must establish within 60 days and continuously maintain a registered office and registered agent (NE, IA), and notify the Secretary of State if registered office or agent has changed (within 120 days NE, within 60 days IA).

Board Roles and Responsibilities Defined

BoardSource Board Roles and Responsibilities

Duty of Care

The duty of care describes the level of competence that is expected of a board member, and is commonly expressed as the level of "care that an ordinarily prudent person would exercise in a like position and under similar circumstances." This means that a board member owes the duty to exercise reasonable care when he or she makes a decision as a steward of the organization.

Duty of Loyalty

The duty of loyalty is a standard of faithfulness; a board member must give undivided allegiance when making decisions affecting the organization. This means that a board member can never use information obtained as a member for personal gain, but must act in the best interests of the organization.

Duty of Obedience

The duty of obedience requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission.

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