Being on a non-profit board can be rewarding. But do you know how to do it? This week we look at what it means to be a non-profit board member and what your responsibilities are.
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Good day and welcome to the leading with nice daily. My name is Mathieu Yuill in this week we are going to talk about volunteering on a nonprofit board of directors and we’re talking about that because this is usually around the time of the year when nonprofits have their AGM, they’ve filed their taxes and they’re gearing up for an April may or June AGM where they’ll elect their board of directors. Now, most people who even sit on board of directors for nonprofits don’t really know what they’re supposed to do, so this week we’re going to do a high level talk about what you should expect if you’re considering running for position. Now there the job of a board of directors is to govern and if you put that on a spectrum on the far, we’ll say the left side, you would have a board of directors that are doers, they’re actually doing the work.
Then moving over towards the center, you would have a board of directors that manage the nonprofit and they’re the ones who manage the work. Then in the middle, you have the governors and they are the ones that create policy, work with the executive director, or the person in charge of the day to day to create strategy and write policies and then moving over to the right. You would have those who are, you know, rubber stampers who just show up and kind of vote yes for everything and don’t really engage in conversation and encourage debate. Even if the consensus seems like it’s all good, they don’t, they’ll just rubber stamp things without having debate and then on the far right is the people that are just unengaged that may or may not even show up to meetings. You want to come with a mindset of governing. You don’t want to do the other four things.
You want to be a governor. Now, there are three main duties that a nonprofit board member has. These are their responsibilities. The first is the duty of diligence. This is to cross T’s dot I’s ask questions. Even if a deal or a situation or a policy just looks too good to be true. Your job is to ask questions to investigate. To go that extra step. You are the governor, you are the person responsible and part of the team that’s responsible for this nonprofit. Your job is to question the person who brought it. How did you arrive at this decision? Where else did you look? Also things like did you get other quotes for this job? If we’re going to be approving X amount of dollars, what is the process for us spending this money that is diligence. The next is duty of loyalty. So you cannot be an on a board member of two boards that might have competing interests.
So for example, if your nonprofit is renting space in a church for example, or another nonprofit, you cannot also on the board for that church or nonprofit because if the building owner asks for a rent increase, well as a board member for the nonprofit renting the space, your job is to get the best deal. And your job as the building owner, nonprofit that owns a building is to get the most rent. So you can see how that would cause a loyalty issue. And now the last one I want to really be clear about because often people think that they have a get out of jail free card in this. And the third rule, the third duty, third obligation of any nonprofit board member is the duty of obedience. And what that means is this, you as a board, because one voice, it doesn’t matter if the vote only won by one vote, you are bound to uphold that vote.
You can’t say, well, I’m not going to follow that because I didn’t vote for it. Also, if something comes up where you are being challenged legally, whether it be, criminally or civilly, you as a board member are responsible for whatever the decision the board made as a whole. Which is why it’s really important. The first two diligence and loyalty you are, you know, sticking to, and finally, you need to follow the bylaw, the constitutions, the policies, the rules and regulations of the nonprofit. In addition to, of course, all the laws of Canada and the province and city or whatnot you’re living in. And there are four laws that kind of talk about nonprofits, the income tax act, the Canada corporations act, the Canada not for profit corporations act and the charities registration, security information act. Those are where all the laws that would generally apply to you and your role are found.
Now it is actually the responsibility of the board of the nonprofit board to ensure they have great diverse representation. So that means diversity in terms of skillset, diversity in terms of experience in life, etc, etc. It makes no sense for you to have three or four lawyers on a nonprofit board of say nine people the same way. It would make no sense to have three or four people that are skilled in marketing and communications on that same board. You need people that potentially have some social skills in terms of working with the public, not necessarily in terms of being friendly and whatnot. You need some administration people. Definitely somebody with a finance background, somebody that has a, maybe some corporate background, if you’re dealing in the same, healthcare. Maybe somebody who has a healthcare background. These are all the types of people you want to have.
It’s not about just getting good people. It’s about getting good people that have the skills that are needed to help lead policy and governance and advise the executive director or whoever that person is who’s running the nonprofit. Also, you want to make sure that your board members have some sort of term limits for a few reasons. One, you don’t want the same people on there forever because it does not lead to great innovation. It also, really helps shrink your nonprofit because eventually, you’ll see those people will have to leave and they’ll have been no work to build up a new group of people to take over the reins. Now I want to talk about the reason why you really should do this. And the biggest reason is, first of all, you have a skill and it’s actually not being taken advantage of to its fullest potential that you can offer some great gift to an organization that really needs it and they’re going to use that gift to do great things with it.
Now that means you should do your due diligence. You should check out the nonprofit, you should maybe talk to some past board members to make sure that they will do these things and it will be good experience. But it’s so rewarding. It will bring fulfillment to your life and it will just really give you all those great chemicals in your brain that, and he feels great and happy when you’re generous with your time and your, your talents and your treasure. And it’s not all about just giving money to a nonprofit that’s, that’s not the study of what it means to be a nonprofit board of director. However, you should think about being somehow financially engaged in the nonprofit. And lastly, it’s just such a great way to network. I mean, it’s a selfish reason, but it’s, it’s not, it’s not a bad reason. It’s a good thing to network and build your professional network.
And also you can actually make some really great friends in nonprofits. So if you have a skill, if somebody is recruiting you seriously, think about it. But give yourself a limit, say two years, three years, and that’s it. And I’d really cap it at three years. I wouldn’t suggest going four or five for sure. You need to get out of Dodge, but think about one year to learn year two to really start executing and year three to kind of finish that plan that you’ve called the board for and recruit somebody to replace you. That’s all for today. I hope you enjoyed this topic and I just, I hope to hear about you on a nonprofit board of directors in a few months. That’s all for this week. For more on this topic, visit Leadingwithnice.com or we want to help you inspire others, build loyalty and get results. Talk to you again next week.