Commercial and Nonprofit Boards of Directors

While for-profit and nonprofit organizations may have some differences they all require a clear oversight by a group of people who want the business to be successful. The governing body, also known as the board of directors, usually includes people with a range of capabilities and connections. To be successful, boards of directors for nonprofit organizations should look for individuals who are committed to the mission and committed to seeing the organization reach its goals. The board should encourage new members to join committees that will assist them in gaining experience in governance as well as other topics.

In general, commercial and non-profit boards or directors are governed by laws of the government, or by articles of incorporation, and bylaws and the constitution of the board. These documents establish how the board is to be organized, which includes the number of directors with voting rights and how the board has to inform members of its meetings and the minimum number of votes required to form a quorum. Both types of boards have written policies on conflicts of interest and independence of directors. They also provide for the confidentiality and indemnification.

Typically the board will comprise at least one or more officers (President Vice President, Secretary, President and Treasurer). These roles and their distinct terms are usually specified in the bylaws of the company. While the President may also be the Executive Director or CEO It is crucial to keep in mind that the two positions are not the same and to ensure that the president’s duties are focused on oversight of board members and governance, while the CEO/ED’s focus is on management.

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