Transcript Boards and Governance Recruiting and developing the board of directors General Requirements  According to Indiana state code, each non-profit organization in the state.

Boards and Governance
Recruiting and developing the
board of directors
General Requirements
 According to Indiana state code, each non-profit
organization in the state must have a board of
directors comprised of a minimum of three
members.
 Board members should be talented, connected,
interested members of the community that
provide a broad range of expertise and
community representation.
 Employees and their family members should not
serve as board members.
 The founding board will develop and change
over the course of a non-profit’s existence.
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Structure
The only limitation for the size of a board of
directors in Indiana is the requirement of a
minimum of three members. The size of
the board may exceed fifty members,
depending on the size of the organization
it is governing and the number of tasks set
out before it. As a general rule, most nonprofit organizations have a board of 6-18
members.
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Recruitment
New organizations should focus on two areas of
expertise when recruiting board members:
resource development and managerial oversight.
For this reason, recruitment of board members
should be done in two stages:
 Stage one: Recruit members that have access to
wealth and/or have fund-raising skills
 Stage two: Fill out the rest of the board with members
who have skills and experience in the following areas:
financial, legal, accounting, management, etc.
It may also be helpful to target members with links
to certain professions, geographic
representations, community segments, and
personal backgrounds.
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Term Limits
The average term limit for a non-profit board
member tends to be between two and six years.
It is recommended that members’ tenures are
staggered so that new members are brought in
periodically, keeping the board stocked with
experienced members and fresh points of view.
A board member should serve no more than two
consecutive terms, and take a hiatus of one year
before he or she is re-appointed to the board. A
board member who is on hiatus may serve on
committees or as advisers to the board.
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Role of Founder
The founder of an organization usually
becomes either the Chief Executive Officer
or the chairman of the board. The founder
may oversee the selection of the CEO and
the board members according to his or her
vision. The role of the founder is subject to
change if the organization’s mission
changes.
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Committees
 The purpose of committees within the
board of directors is to have a small group
that will focus on one issue according to
the members’ areas of expertise and to
make recommendations to the full board
on that particular issue.
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Committees, continued
According to Indiana law, there must be a
minimum of two members on each board
committee. Ideally, each board member will
serve on one or two committees. Not all
committee members must be on the board of
directors.
Examples of non-board members that may serve
on committees include:
 Staff members
 Potential board members
 Former board members, including those on hiatus
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Committees, continued
Examples of common board committees
include:

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Executive: Effectively operates between
meetings and represents the full board with any
emergency decisions. This is the only
committee that may act on behalf of the board,
within boundaries defined in the bylaws;
however, in most instances, the executive
committee brings forth all decisions for approval
by the full board.
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Committees, continued
 Nominating: Identifies, cultivates, and nominates
potential board members. Assesses the composition of
the current board, determines needs, and recruits and
screens potential board members. Also, the nominating
committee appoints ad hoc members to committees to
work on specific issues.
 Finance: Recommends financial policies and monitors
staff members’ financial reports.
 Audit: Oversees the annual financial audit of the
organization.
 Development: Provides leadership in fund-raising and
resource development, and works with staff on the
organization’s fund-raising plan.
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Committees, continued
 Strategic Planning: Provides board’s role in the
organization’s long-term planning.
 Facilities: Focuses on the organization’s buildings
and grounds and physical plant management.
 Personnel/HR: Advises the CEO on personnel
policy issues.
 Other miscellaneous committees: Marketing,
Public Affairs, Program, Education
Finally, ad hoc committees may be periodically
formed to address short-term problems that may
come up.
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Meetings
A typical non-profit board meets nine to twelve times per
year, depending on the amount of work that must be
done. The board’s yearly meetings should be scheduled
one year in advance. If the board is especially large, the
whole group may seldom meet, with individual committees
doing the majority of the work.
The following policies regarding board meetings should be
covered in the organization’s bylaws:
 Board member attendance policy
 Constitution of quorum (the minimum number of members that
must be present at any given board meeting)
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Record-Keeping
Thorough minutes should be maintained for
every board meeting and kept on file
throughout the life of the organization,
along with the following documents:
 Articles of Incorporation
 Bylaws
 Tax-exempt letter
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Legal Matters
Responsibilities of the Board
The following are the generally accepted
responsibilities of every board member:
 Duty of Care: Responsibility as a steward of the
organization
 Duty of Loyalty: Standard of faithfulness and
allegiance to the organization. A board member must
always act in the best interest of the organization and
not for his or her own personal gain
 Duty of Obedience: Faithfulness to the organization’s
mission
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Legal Matters, continued
Board Liability
 It is not necessary for every non-profit to have a
lawyer on retainer, but it is recommended that
someone with legal expertise is available for
advice. It is common to have at least one lawyer
on the board of directors for this reason.
 Directors’ and Officers’ Insurance policies can
be purchased in order to cover possible
liabilities.
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Assessment and Development
The board of directors should continuously be
assessed in order to benefit from future board
development. The board may assess itself
according to what skills are already in place, and
what skills are necessary for the direction the
organization is taking. What skills are necessary
to achieve the future goals of the organization?
A plan for recruitment can then be developed
based on the assessment of the current state of
the board.
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Final Note
This resource provides only a brief overview
of board requirements and information
regarding governance. For more on this
topic, consult the resources listed on the
following page.
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Additional Resources

“Board and Staff Responsibilities”
http://www.managementhelp.org/boards/brdvsstf.htm

“Free Complete Toolkit for Boards”
http://www.managementhelp.org/boards/boards.htm

“Governance of Charitable Organizations and Related Topics”
http://www.irs.gov/charities/article/0,,id=178221,00.html

“Governance Matters: Nonprofit Governance Indicator Guide”
http://governance1.web132.discountasp.net/web/NGIG/index.aspx

“Board Basics”
http://www.idealist.org/if/i/en/faq/526-245/3-1

“Indiana Code 23-17-12: Board of Directors”
http://www.in.gov/legislative/ic/code/title23/ar17/ch12.html
Information was also gathered from:

BoardSource eBook:
Starting a Nonprofit Organization.
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