Organizational Structure

Oversight: Fiduciary Duty

Author: 

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
http://www.nonprofitpanel.org/final/index.html

Panel on the Nonprofit Sector Principles of Good Governance and Ethical Practice
http://www.nonprofitpanel.org/

Fiduciary Duties of Charitable Organizations, from Office of the Minnesota Attorney General Lori Swanson
https://www.ag.state.mn.us/Brochures/pubFiduciaryDutiesofDirectors.pdf