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As a board member for a nonprofit, you have a fiduciary duty. During board meetings, you participate in decision-making that significantly impacts the organization, as well as volunteers, staff, clients, and the community served by the group.
But what information is essential to make important decisions with confidence?
It should be an institutionalized expectation of the executive director to provide the board with information that aids decision-making. Essential to every board meeting is background about any legal obligations, plans of action, and performance measurements. Providing reports, financial statements, and other records will help keep the board informed about the essentials:
Records
Institutional, legal, federal tax, insurance, and important correspondence
- Annual review of Articles of Incorporation and Bylaws
- Parameters for operations and board governance
- Board meeting agendas and minutes
- Annual completed IRS Form 990, prior to filing
- Annual insurance summary page included with policy, prior to taking effect
- Liability as well as Directors and Officers
- Contracts, memorandums of understanding, and agreements
- For independent contractors
- For significant, legally binding documents, prior to taking effect
- Letters from stakeholders or significant business correspondence
- At the board meeting immediately following receipt or in a timely manner
Financials Updated and provided monthly (and directly from the accounting software)
- Profit and loss (income and expense) report
- Reflects changes in organization's assets based on income and expense activity
- Balance sheet
- Reflects the organization's assets, less it's liabilities to arrive at a net asset figure, i.e. what is in the bank and what is owed
- Budget to actual comparison
- Tool of measurement of actual financial performance against targets
Reports Regular, written summaries from the executive director and all committees outlining progress, proposals, successes, and challenges in fulfillment of their charge
- Comparisons of target goals to actual performance
- Requests to the board, with necessary background information
- Recommendations to the board, with necessary background information
As a board member, when you have access to this information you are equipped to make the decisions that will impact your organization's vision, goals, and future. |
