Organizational Structure

Oversight: Fiduciary Duty

Note: Articles published before January 1, 2017 may be out of date. We are in the process of updating this content.

As the fiduciary of the organization, the board as a body and each individual board member must always act for the good of the nonprofit. The board is expected to exercise due diligence while overseeing that the organization is well-managed and its financial situation remains sound. Some of the oversight responsibilities of the board include:

  • approving the budget
  • monitoring financial statements
  • installing adequate internal controls
  • ensuring all legal obligations are met


What to do:

  • Approve budget annually
  • Receive timely, accurate, comprehensible financial statements from staff
  • Ensure appropriate and adequate internal controls are in place
  • Know the laws that govern your organization and ensure legal compliance
  • Make sure all necessary federal and state filings take place
  • Annually review the performance of the chief executive
  • Oversee program outcomes and monitor program progress

Additional references:

Panel on the Nonprofit Sector Final Report of the Panel

Panel on the Nonprofit Sector Principles of Good Governance and Ethical Practice

Fiduciary Duties of Charitable Organizations, from Office of the Minnesota Attorney General Lori Swanson