Directors or Boards are the governing bodies of almost all non-profits as well as businesses. They decide on the policies for the company, award recognition to those who implement these plans, and oversee the executive staff. Many nonprofits also have advisory boards to provide guidance or advice to the executive director and board.
Boards that are nonprofit and commercial have a few commonalities on the road to success. Healthy boards require the careful recruitment, training and orientation of new members. They also require a collaboration between board members and staff.
A major function of both kinds of boards is establishing strategic goals and ensuring that management’s actions are aligned with these goals. Both types of boards need to ensure that there are operating plans, that financial resources and allocations are made in a manner that is consistent with near- and long term goals for the organization, and that policies encourage the adherence to ethical and legal standards.
Non-profit boards are typically larger than for-profit ones, since they must represent all parties who have an interest in the institution. This often results in the boards of colleges that are independent, for example having at least 70 members who are parents, teachers staff, alumni and faculty serve on them, along with wealthy individuals.
Typically both nonprofit and for-profit boards meet at least once a year to discuss their work and make decisions. They also have governing documents, which include articles of incorporation, bylaws and descriptions of the obligations and responsibility of the board as well as committees, and individual directors. The two types of boards create written policies which include guidelines for director autonomy, conflicts of interest as well as codes of conduct and indemnification.