The Board of Directors Requirements

by Michelle Matthews; Updated September 26, 2017

In nonprofit and for-profit settings, talented individuals are needed to keep an organization afloat. To avoid conflicts between the staff and the board, many groups, including Idea.org, recommend establishing requirements and responsibilities for the board of directors. There are some responsibilities that are common throughout most boards.

Establish the Mission

The board of directors must initially formulate an organization's mission and purpose. Part of the mission is understanding the vision and what the goals and policies are for the organization.

Strategy

The main role of a board of directors is to do just that--direct the organization. To direct, the board must use strategy. Directors must look at opportunities or threats in the market or in competition. What about the company or organization can be improved? How? Does the company have what it needs to make these changes?

Work with the Executive

A board of directors will select and hire an executive or president by committee. An executive or president reports to the board about day-to-day activities at the organization. The board must support the executive and give feedback on his performance. Also, the board must delegate to the executive any work that must be done to carry out the mission and strategy.

Manage Resources

Boards typically oversee the budgets and delegate salaries and pay raises. In a corporate board, this is an especially important requirement because of the board's responsibility to shareholders and stakeholders. In a nonprofit setting, board members are more responsible for fundraising.

Work as an Appeals Board

In many settings, the board of directors works as an appeals board for employees. Presenting and speaking to the board can help solve workplace issues, whether disciplinary or financial.

Manage Services

In a nonprofit setting, the board of directors determines what sorts of programs the nonprofit runs. The board of directors should consult with employees of the organization to get a good feel for what's best. In the private sector, managing services may mean determining what products are being sold or what marketing campaign will be used.