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Governance Basics

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Governance Basics

Basic Role of the Board

Good governance in the non-profit sector means effective board governance. The board of directors is charged with achieving desired results in the right way.

All boards share a fundamental stewardship role which includes the inescapable basic responsibility to promote the health and well-being of their organizations.

What follows is a basic job description of the board, though this may vary from one type of board to another in practice. The responsibilities necessary to fulfill the governance role fall under three broad categories:

Representation
  • Represent the stakeholders
  • Carry the public trust
  • Facilitate board rejuvenation — organize the selection of new directors
Decision-making and leadership
  • Establish or affirm mission: Development and/or custodianship of the organizational purpose, mandate and identity
  • Strategic Direction: Provide vision for the future; Develop and implement the long-term plan; Set or approve the general direction and financing of the organization; Ensure that the organizational mission remains responsive to changes in the environmental context and organizational realities;
  • provide an accountability structure to management; direct and advise management; select, support, evaluate and, if necessary, terminate the senior manager [See note]
  • Financial Stewardship: Trusteeship of financial resources to ensure that funds are expended for the purposes intended
  • Human Resources Stewardship: Framework of HR policies
  • Risk management
  • Managing transitional phases and critical events: act as organizational safety net
  • Represent organization to the community
Accountability
  • Ensure transparency of the process
  • Monitor and evaluate performance
  • Responsibility and reporting to stakeholders
  • Act as the ultimate source of accountability under the law for the performance and actions of the organization

The next section takes a closer look at what mission-based board governance is, and the building blocks of a governance framework.

 
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