Doing the Right Thing: Roles and Responsibilities of Nonprofit Boards

Transcription

1 Doing the Right Thing: Roles and Responsibilities of Nonprofit Boards Presented by: Claire Higgins New York Council of Nonprofits, Inc. 272 Broadway, Albany, New York , ext Community Focus Statewide Impact National Network

2 Board Members Are Volunteer Leaders Who Advance their Organization s Mission in a Responsible Manner

3 The Mission The tax-exempt purposes States the fundamental reason why charity exists Activities, for which resources are to be devoted, flow from the mission Official statement is in your Certificate of Incorporation

4 Your Mission Statement The mission of Jewish Federation of Northeastern New York is to build and maintain a strong and united Jewish community in order to ensure the creative survival and continuity of the Jewish people. It is the community's central agency for meeting Jewish needs and articulating Jewish concerns in the Capital Region, in Israel, nationally, and around the world.

5 Board Members Are Fiduciaries A duty to act for someone else s benefit and hold another s interest ahead of own Special responsibilities in connection with the administration, investment and distribution of assets, where those assets belong to someone else Includes the duties of care, obedience, and loyalty

6 Duty of Care Each member exercises the care, & skill that a reasonable person would exercise in a like position & under similar circumstances The degree of competence & care expected to avoid reasonably foreseeable harm Diligence, attention & informed participation The Pay Attention Duty

7 Duty of Obedience The laws & regulations that govern the organization's actions including: Federal, State & Local Laws The Bylaws Licensing Regulations Contractual Obligations Board decisions

8 Duty of Loyalty Demonstrated allegiance & faithfulness to the mission, board, office & organization Make decisions based on your support of the mission Follow the established chain of command Be publicly supportive of organization Actively avoid conflicts of interest Disclose real or perceived conflicts (material or otherwise)

9 Conflict of Interest New State Laws (effective 7/1/2014) Must have written conflict of interest policy and procedures for disclosure Person with conflict: Cannot be present/participate in deliberations or vote Cannot make any attempt to improperly influence Must consider alternatives to related party transactions and, if approved, show that transaction is fair, reasonable and in best interest of the organization Must document disclosure, deliberations, reasons & resolution to approve in minutes

10 Board Members Can Be Held Responsible For: Violations of law, including employment related claims Operating outside of the bylaws Gross error or neglect of fiduciary, legal, & financial responsibilities if they serve on the board of a 501(c)3 in a volunteer capacity Unpaid payroll & other taxes Outstanding debt upon dissolution

11 Board Members Are Protected By: Immunity Laws Risk Management Insurance Options

12 An Accountability Structure... Clearly defines the monitoring, reporting & decision-making roles & tasks at the board & staff levels in order to know who is responsible for what, accountable to whom & in what ways

13 Accountability Starts with the Bylaws Legal document; must conform States the rules - your rules for governance & participation including process to change the rules Defines composition, selection process, duties, functions & organization of the board Defines role of Executive Director/CEO Risk management tool

14 Your Key Bylaw Features: Membership Corporation members elect board of directors and officers Board of Directors: All Officers, 2 immediate past Chairs, 36 members, Chair of Endowment Fund, Board of Rabbis representative Term limits: 2 consecutive 3 year terms Officers: one year terms, no more than 3 consecutive terms Executive Committee: Officers, Immediate Past Chair, Committee Chairs Quorum: 15 Board; 10 Executive Committee 16 standing committees with members selected by committee chairs

15 Key NYS Reforms that May Require Bylaw Revisions Some electronic age updates for Board, Committee & Membership Meetings and for Filings with AG s Office Required Conflict of Interest Policy New Definitions & Significantly Stronger Requirements Higher Audit Thresholds & Increased Audit Oversight Required Whistleblower Policies (20 or more employees and $1M) Improved processes for Certificate Amendments, Mergers, Dissolutions & Consolidations, Real Estate Sales or Transfers Staff can t serve as chairperson (Postponed: takes effect Jan. 2016) Redesigned Committee Structures Definitions for Entire Board (c) 2014 NYCON, Inc., Copyright, All Rights Reserved 15

16 Meetings New State Laws Allows video conferencing Unanimous written consent by for board or committee action (must have electronic signature) In using fax or , the number or address must be what is on record for the Secretary. Not valid if notice cannot be delivered two consecutive times

17 Policy & Implementation Spheres Policy-making Board of Directors Shared Responsibilities CEO/Executive Director Shared Responsibilities What Role Does Your Board Play? Rubber Stamper? Cheerleader Watchdog? Policymaker? Shared Manager? Micro-manager? Implementation Staff

18 Role of the CEO/ Executive Director All employees are important to the organization s success, but the Executive Director/CEO is directly accountable to the board, & is the essential member of the staff

19 Clearly Define CEO/Executive Director s Authority Define general & lasting parameters in bylaws Have updated, board approved job description

20 CEO/Executive Director and Staff Responsibilities Program and Property Management Personnel Administration Agency Operations Provide vision, professional support, guidance & advice to board Implement board policies

21 Board-Staff Shared Roles Formulate policy Budget making and fiscal reporting Fundraising Public relations and marketing Program development and evaluation Resource allocation

22 Delicate Balance of the Board Leadership ED/CEO Relationship Board of Directors Board Committees Critical Relationship Center Executive Committee Officers: Secretary Treasurer Vice Chair Chair ED/CEO Assistant Director Managerial Staff (incl. Fiscal Officers) Program and Support Staff

23 Major Focus Areas for the Board 1. Board Management & Development 2. Personnel 3. Fiscal Oversight 4. Resource Development 5. Stakeholder and Community Relationships 6. Programs/Quality Assurance 7. Planning for the Future

24 Board Management and Development The Board s Role: Define expectations of members Regular assessment Strategically recruit & nominate members, officers within bylaw procedures Orient new members & provide ongoing development Manage board deliberation & decision-making processes Make sure bylaws & policies work for organization

25 Personnel The Board s Role: Review and approve personnel policies to ensure legal compliance Ensure consistent application of personnel policies by Board & CEO/Executive Director Hire, supervise, evaluate & set compensation for CEO/Executive Director Develop & recommend compensation philosophy and procedures to the board Direct staff concerns to CEO/Executive Director

26 Fiscal Oversight The Board s Role Select & monitor a capable Treasurer who is custodian of the corporation s funds Approve & ensure consistent application of fiscal policies Approve annual budget and revisions Monitor & assess financial condition & viability Approve investments and related strategies Select audit firm Receive & accept audit(s) Accept & respond to management letter Ensure compliance with all auditing recommendations & regulations

27 Audit New State Laws With over $500K, board or committee (not staff) must retain auditor Must have the board or a designated audit committee comprised solely of independent directors oversee the accounting, financial reporting processes and audit (including reviewing results and management letter) Additional requirements for organizations with revenue in excess of $1M.

28 Resource Development The Board s Role Assure adequate resources Determine fund development plan & related policies Represent the agency: to funders, donors, government officials & other constituents Establish policies regarding board participation

29 Stakeholder/ Community Relations The Board s Role Serves as ambassador & represents nonprofit to the community, constituents & other stakeholders Assists board & staff in becoming aware of issues, community needs, opportunities, etc. Exercises influence to promote nonprofit s interests

30 Programs/Quality Assurance The Board s Role Determines program-related policies & priorities Monitors & ensures that organization is: Meeting standards relative to integrity, safety, required components & documentation Planning for continuous improvement Monitors program evaluation to make sure that services produce desired mission-based outcomes Reviews & acts on external program audits

31 Planning for the Future The Board s Role Develops a realistic, but stretch plan for the future that is mission appropriate & based on a strategic vision Assumes responsibilities to oversee/carry out the plan & monitors progress Revises plan as appropriate to address changing environment & circumstances Works to build a board & staff strategic organizational culture

32 How Do We Make It All Work? Clearly define expectations of board and staff members: Board member and officer job descriptions Staff job descriptions Code of ethics Develop a working committee structure Work to build a team that speaks with a unified voice

33 Board Committees: Setting Up Your System Create only committees that can be sustained Distinguish between committees of the board and committees of the corporation Recruit non-board members for committees of the corporation

34 New Rules on Committees Committees of the Board Can bind the Board Comprised only of Board members (at least 3) Appointed by majority of Board Cannot: Fill board vacancies Fix board compensation Adopt or amend bylaws Amend or appeal board resolution May include non-board members in advisory capacity Committees of the Corporation Cannot bind the board May include non-board members Are to be appointed or elected the same as officers as stated in the bylaws Can be accountable to the Board or to the Executive Director (c) 2014 NYCON, Inc., Copyright, All Rights Reserved 34

35 16 Standing Committees: Your Current Committee Structure Executive Grants, Allocations, Program Review Planning Finance Nominating Campaign Cabinet Jewish Community Endowment Fund Community Relations Council Human Resources Development Community Coalition for Jewish Education Women s Philanthropy Agency/Federation Relations Synagogue/Federation Relations Committee on Aging Marketing Young Adult Division