Board members are the fiduciaries who steer the organization towards a sustainable future by adopting sound, ethical, and legal governance and financial management policies, as well as by making sure the nonprofit has adequate resources to advance its mission.
The Board of Directors has three primary legal duties known as the "duty of care," "duty of loyalty," and "duty of obedience."
Duty of Care:
Take care of the nonprofit by ensuring prudent use of all assets, including facility, people, and good will;
Duty of Loyalty:
Ensure that the nonprofit's activities and transactions are, first and foremost, advancing its mission; Recognize and disclose conflicts of interest; Make decisions that are in the best interest of the nonprofit corporation; not in the best interest of the individual board member (or any other individual or for-profit entity).
Duty of Obedience:
Ensure that the nonprofit obeys applicable laws and regulations; follows its own bylaws; and that the nonprofit adheres to its stated corporate purposes/mission.