To Whom Does a Nonprofit’s Board of Directors Report?
This article is first in a series of reflections on the Roles and Responsibilities of Nonprofit Boards: It’s Time for Some R & R: That’s Roles & Responsibilities - Not Rest & Relaxation
In a typical nonprofit organizational chart, at the top we find the board of directors. Just below it on the chart usually sits the box for the executive who can assume a variety of titles and who reports directly up to the board. Operationally, everyone eventually reports to the executive who then reports and is responsible to the board.
But, to whom or what does the board report?
In many cases, directors might say, “We report to no one.” The board is often seen as sitting at the pinnacle of decision-making and responsibility for the organization. To a certain extent it does. We even have special insurance for boards of directors, given their unique position in the organization and responsibilities they hold.
But, not so fast…
There is—or should be—another box above that of the board: the organization’s mission and the social need and community from which the mission emerges.
The board’s mandate, in reporting to the mission and the community, is to ensure that the organization is operated and organized in a manner that helps it to fulfill that mission effectively and efficiently. This is true no matter the mission.
From this obligation flows the board’s responsibility to act with certain duties, amongst which are care, loyalty, and obedience. An understanding that it does not occupy the top box on the organizational chart means that boards cannot act with impunity, just as no other position represented by any box on the chart can do so.
As a result, the board needs to ask four important questions whenever it has a decision to make. How does the decision…
Impact the organization’s ability to fulfill its mission in the short, medial, and long-term?
Affect those who benefit from the mission?
Impact the resources the community has entrusted to it?
Reflect the values to which the organization subscribes and deems necessary to its mission-related work?
If boards understand that they do not occupy the top box, they can allow themselves to draw inspiration from the mission and to be guided by it when making decisions. They should be expected to do this, just as anyone, anywhere on the organizational chart should expect to be inspired and led by those to whom they report. In the same way, boards should lead in a manner that inspires, guides, and promotes trust in those who ultimately report to it. They should be willing to examine and hold themselves accountable for their own behavior.
Thus, the focus is not on the hierarchy and multiple layers on the chart that ultimately report to the board, but about to what and whom the board reports. Such mission-focused, mission-guided thinking then creates an atmosphere for such thinking to permeate the whole organization.