Organizational Structure
Oversight: Fiduciary Duty
Note: Articles published before January 1, 2017 may be out of date. We are in the process of updating this content.
As the fiduciary of the organization, the board as a body and each individual board member must always act for the good of the nonprofit. The board is expected to exercise due diligence while overseeing that the organization is well-managed and its financial situation remains sound. Some of the oversight responsibilities of the board include:
- approving the budget
- monitoring financial statements
- installing adequate internal controls
- ensuring all legal obligations are met
What to do:
- Approve budget annually
- Receive timely, accurate, comprehensible financial statements from staff
- Ensure appropriate and adequate internal controls are in place
- Know the laws that govern your organization and ensure legal compliance
- Make sure all necessary federal and state filings take place
- Annually review the performance of the chief executive
- Oversee program outcomes and monitor program progress
Additional references:
Panel on the Nonprofit Sector Final Report of the Panel
http://www.nonprofitpanel.org/final/index.html
Panel on the Nonprofit Sector Principles of Good Governance and Ethical Practice
http://www.nonprofitpanel.org/
Fiduciary Duties of Charitable Organizations, from Office of the Minnesota Attorney General Lori Swanson
https://www.ag.state.mn.us/Brochures/pubFiduciaryDutiesofDirectors.pdf