Board Development

Fast Facts About Boards

By December 12, 2017 No Comments

Quick answers to your basic questions about boards

Unlike private businesses, nonprofit organizations are not “owned” by anyone. Instead they are “owned” by the community: chartered by the government to serve a public purpose. The board of directors represents the community’s interests. The board, acting as governors or trustees, is charged with protecting the nonprofit organization’s public purpose. Nonprofit boards and boards of private corporations are similar in that both are responsible for the organization’s success.

How a  board functions
By law, the board of a nonprofit organization must act as a group. Decisions must not be made by individual board members, but by the whole board or a board committee authorized to act on behalf of the entire board. Boards generally make decisions using a majority vote or consensus. The organization’s bylaws should state the vote required for formal board action.

Required number of board members
California law states that a CA nonprofit must have directors and officers. Legally, a CA nonprofit corporation can operate with one director, and two officers: a president or board chair, secretary, and chief financial officer (two of these can be combined, e.g. president/secretary or secretary/cfo, but president and cfo cannot be combined.) Meeting these legal minimums makes you legal, but probably not viable.

Recommended number of board members
There is no agreement on the perfect size for a board. Nine to 15 members are often quoted numbers, but some boards are much larger. However, experts agree that an active, involved board made up of committed people from the community is essential. What’s the Right Size for the Board? offers advice from a nonprofit board expert.

Paying board members
California law allows board members to receive “reasonable compensation.” However, this is not standard practice within the nonprofit community. National charitable standards state that board members should be volunteers with occasional reimbursements for actual expenses of attending meetings.

Board members as employees
Under California law, no more than 49% (in plain language, less than half) of the board of directors of a nonprofit public benefit corporation can be employees. Again, while this is legally permissible, it is a rare practice to have employees serve on the board of directors, with the possible exception of the Executive Director. The Center advises that organizations not have any employees serve on the board so as to not confuse the issues of authority and supervision.

Removing board members Occasionally a board member needs to be removed.  Here are Four Ways to Remove a Board Member.

Youth on boards
Under California statutory law, there is no minimum age requirement for directors of a nonprofit corporation. The relevant statute states only that the Bylaws of the corporation may contain any provision regarding the qualification of directors. CAL. CORP. CODE § 5151(c)(3).  Read more here: Youth Board Members: Can minors serve on a nonprofit board? at the Nonprofit Law Blog.