Limiting liability for board members

Writing about the role of a board’s treasurer made me think about how important it is for all board members to understand the duties of his or her office. As an auditor, I want to be sure that an organization limits the board’s liability. I’ll be overviewing key board positions over the next month or so.

Board chairperson

The chairman of the board of an organization essentially divides her or his activities into two categories:

Responsibilities for and with the organization’s chief executive

–         Prepares board meeting agendas

–         Carries out or oversees the execution of board resolutions

–         Acts as qualified advisor (to the chief executive)

–         Appoints committee chairs

–         Conducts orientation for new board members

–         Acts as a spokesperson for the organization

–         Recruits new board members

Responsibilities for and with the board

–         Presides over board meetings and facilitates discussion

–         Presides over executive committee meetings

–         Discerns when to vote or abstain on an issue, or break a tie

–         Conducts an annual review for the chief executive

–         Leads search process for a new chief executive

–         Reviews the roles and progress of individual board members

–         Identifies and solicits funds that support the organization, including individual, corporate and foundation gifts

–         Makes a financial donation to the organization reflecting a personal priority to the organization, and encourages other board members to contribute financially

–         Reviews and is familiar with all financial aspects of the organization

Fully understanding roles and having written job descriptions eliminates confusion and consequently, limits liability for decisions and actions.