Boards or directors are the governing bodies of nearly all non-profits and companies. They establish the plans for the organization, give the individuals who execute these plans, and oversee the executive staff. Many non-profits have advisory board members that provide advice and guidance to the executive director or board.
Both commercial and nonprofit boards have a few commonalities in the path to success. Healthy boards require careful recruitment, training and orientation of new members. They also require a collaboration between board members and staff.
Both kinds of boards play an important role to play in setting strategic goals and making sure that management’s actions match these goals. Both types of boards must ensure that there are operating plans that ensure that financial resources and allocations are done in a manner that meets near- and long term organizational goals, and that policies promote the adherence to ethical and legal standards.
Nonprofit boards tend to be bigger than those of for-profit businesses, since they need to represent all constituents that have a stake in the institution’s operation. The boards of colleges that are independent usually have at least 70 members, including wealthy parents, wealthy individuals, teachers and alumni.
Typically the for-profit and non-profit boards meet several times per year to discuss their work and take decisions. They also have governing documents, which include bylaws, articles of incorporation and descriptions of the roles and obligations of the board, individual directors and committees. The two types of boards adopt written policies, including the ones regarding director independence and conflicts of interests, codes of conduct, confidentiality and indemnification.