Written by Sheila Filion, CPA, CA
Partner, Virtus Group
The traditional role of the board is to oversee the activities of an organization, not undertake the activities. A simple way to describe this responsibility is “noses in, fingers out”.
Board members should know what is happening in the organization, understand the risks, be aware of the environment and monitor activities and results. Board members should be asking questions, raising concerns and providing strategic direction as needed. The Board is the “coach” directing the organization.
Management should operate the organization in accordance with policy and the strategic plan, and report activities to the Board. Management is the “athlete” running the organization.
For organizations that do not have employees, the Board operates with the dual function of “coach” and “athlete”. It is critical that the Board spend time in both roles to ensure that the long term viability of the organization and the day to day activities are managed.
Clarity of board and management roles and responsibilities should be articulated in position descriptions. If there is a blurring between the two roles, the board should evaluate if it is overstepping, or if there is a performance shortfall by management.
Other articles on Board Governance to read:
- How big should our board be?
- How often should we review our policies?
- How do I find board members?
- What does Risk Management mean?
- What are the top internal control tips for small organizations?
- Donations & Fundraising - what is your policy?
- Why is effective budgeting important?
- Is the CEO doing a good job?
- How much should a not for profit organization hold in net assets?
- Should we meet with our auditor?