The majority of nonprofits and businesses have directors or boards, the governing bodies that create plans for their organizations, award recognition to employees who perform the packages and supervise the executive staff. Many nonprofits have advisory boards which provide advice and guidance to the executive director or board.
Commercial and nonprofit boards share certain commonalities on the way to success. A healthy board requires careful recruitment, orientation and training of new members; focus on building a strong collaboration between staff and board; and respect for the time and dedication required by volunteer board members.
Both types of boards have a key role in setting goals for strategic development and ensuring management’s actions match these goals. Both types of boards have to ensure that operating plans are in place that ensure that financial resources and allocations are made in a manner that meets both long- and short-term objectives for the organization, and that policies encourage conformity with ethical and legal standards.
Non-profit boards typically have more members than for-profit ones, as they have to represent all stakeholders who have an interest in the institution. The boards of independent colleges often have 70 or more members comprising wealthy parents, wealthy individuals teachers, alumni, and parents.
Typically the for-profit and non-profit boards meet a few times per year to discuss their activities and take decisions. Both types of boards have their own governing documents, which comprise articles of incorporation, bylaws, as well as descriptions of the roles and responsibilities of directors, committees, and the board. The two types of boards develop policies in writing, including those on director autonomy, conflicts of interest code of conduct, and indemnification.
