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posted on Aug 17, 2017
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“Governance refers to the processes and structure used to direct and manage an organization's operations and activities. It defines the division of power, and establishes mechanisms needed to achieve accountability between stakeholders, the board of directors, and management.

Good governance systems help organizations focus on the activities that contribute most to their overall objectives: to utilize their resources effectively and ensure they are managed in the best interests of their principal stakeholders.” [1]

Board Responsibilities [2]

Board responsibilities can be defined based on three different activities of the organization.

1.      Governance

The board develops policies which give overall direction to the agency.

2.      Management

The board takes actions and makes decisions to ensure there are sufficient and appropriate human and financial resources for the organization to accomplish its work.

3.      Operations

These are the activities, services or programs of the organization. The board has no mandatory role in this area. Many boards see this work as the responsibility of the staff. However, dependent on the board structure used, some boards choose to actively participate in the operations due to philosophy or limited resources.

The Role of the Board

The board is responsible in five key areas:

1.      To establish the organization’s mission, vision, and direction

This includes strategic planning, deciding which programs and services to offer (and which ones not to offer), and evaluation of programs.

2.      To ensure the financial health of the organization

This doesn't mean just the treasurer; it means everyone on the board. Yes, you too. If you can read the nutrition label on your morning cereal, you can read basic financial statements. Read here for a great blog post on the topic if you’re not sure.

3.      To ensure the organization has sufficient and appropriate human resources

The board is ultimately responsible for the working conditions of the organization and for managing the senior staff person. Management in this context includes hiring, giving direction, and performance evaluation. Further, the board is responsible for ensuring the existence of a Nominating Committee.

4.      To direct organizational operations

Even a policy governance board has organizational responsibilities. The board is ultimately responsible to ensure that the organization and its directors are in compliance with its legal requirements. It is also responsible for ensuring that it itself works effectively.

5.      To ensure effective community relations

Being responsible for strategy means monitoring and responding to changing needs and pressures in the community, and finding new ways to meet those needs. Board members, individually and collectively, also have a responsibility to act as ambassadors for their organization within the community.

What's next?

To learn more about effective board governance, come to one of our upcoming seminars.

Board 101: A First View

Click here to register Wednesday, September 20, 2017. 6:30 to 8:30 p.m.

Board 201: A Complete Look at Being on a Board of Directors

Click here to register Saturday, October 28, 2017. 9:00 a.m. to 3:30 p.m.

[1] SaskCulture, "The Non-Profit Board's Role in Governance," SaskCulture, [Online]. Available: http://www.saskculture.ca/programs/organizational-support/organizational-resources?resource=1&subresource=3. [Accessed 14 August 2017]. | [2] C. O. Houle, Governing Boards: Their Nature and Nurture, Josey-Bass, 1997.
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