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Nonprofits depend upon effective leadership to successfully enact their missions and programs. Effective leadership consists of a partnership between the board and management, each of which plays an essential role. Understanding and negotiating these shared and complex elements of leadership is essential to the organization’s success. A nonprofit’s employees and volunteers are fundamental to its ability to achieve its mission.

Board members are in a position of trust to ensure that resources are used to carry out the mission of the organization. An organization’s board leadership should consist of volunteers who are committed to the mission and who demonstrate an understanding of the community served. An effective nonprofit board should determine the mission of the organization, establish management policies and procedures, assure that adequate human and financial resources are available, and actively monitor the organization’s allocation of resources to effectively and efficiently fulfill its mission.

Developing a board of committed individuals who believe in and are willing to work hard to help an organization achieve its mission is one of the keys to success for nonprofit organizations. It is also one of the most important and challenging responsibilities facing the board of directors. An organization’s board, while performing all the ongoing tasks involved in governance, must also plan for its future.

The Standards for Excellence® code recommends that every organization pay close attention to the composition of its board of directors. The board should be composed of no fewer than five to seven unrelated individuals who:

• Are personally committed to the mission of the organization
• Collectively reflect the diversity of the communities served by the organization
• Are volunteers, serving without compensation other than reimbursement for expenses related to their direct service

The Standards for Excellence® code also recommends that board service be subject to term limits, so that board members rotate off the board after a fixed number of years of service.

Individuals may have a variety of motivations for serving on a nonprofit board of directors. Board service presents opportunities for board members to make business contacts, to achieve a position of respect in the community, to learn and professionally develop, and even to have fun. While these are all legitimate reasons for serving on a board, they certainly shouldn’t be the only reasons to serve.

Most organizations want their board members to be passionate about the organization’s mission, and for good reason. The committed board member is much more likely to devote time and effort required for the job. S/he is more likely to regularly attend board meetings, take on committee roles and responsibilities, educate her/himself about the work of the organization, make personally significant charitable contributions, and be an effective advocate of and promoter for the organization wherever s/he may be. If primarily motivated by the organization’s mission and program, rather than by personal goals and concerns, conflicts of interest and other inappropriate situations may be less likely to occur. While passion is important, boards need to assure that the ranks of their board members are filled with individuals who will seriously and responsibly meet the expectations set for each individual board member and the board as a whole.

Want access to resources like sample bylaws, board member job descriptions, board policies, common board member forms, and board orientation? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

There are many ways to structure the evaluation of an executive director. Often the board delegates the job to a subcommittee of the board (e.g. executive team), although the whole board should have an opportunity for input. To begin the process, the board and executive director should agree on the timing and form of the evaluation prior to the start of the evaluation period. The evaluation should be based on predetermined criteria, including the executive’s job description and personal goals, as well as the organization’s goals. The executive usually completes a self-assessment. The board or committee reviews the executive, using the self-assessment. The results of the evaluation should be shared with the executive director and incorporated into plans for future growth.

Want access to resources like sample bylaws, board member job descriptions, board policies, common board member forms, and board orientation? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

In Maryland, nonprofits are private entities and generally are not required to hold “open meetings” unless they were created by governmental action or unless the organization has been required to do so by a governmental entity that funds the organization. However, receiving government funding does not normally require “open meetings.”

According to the Open Meeting Acts Manual, published by the Maryland Attorney General’s office, the first step for anyone challenging a closed meeting is to determine whether the Open Meetings Act applies. That depends on the formal legal authority for the body’s existence. Generally, governmental bodies such as town or city councils, boards of commissioners and school boards must follow the Open Meetings Act. Additionally, boards, commissions, committees and other bodies that function as a subgroup of a public body or are created by a public body might also be subject to the Act.

Private corporations doing business with a government body do not have to follow the Open Meetings Act. However, if a governmental body creates a public corporation to serve some public function, the Open Meetings manual states that the corporation and public body that created it cannot use that means to avoid the Open Meetings Act.

The Open Meetings Act does not cover bodies that were not created by a public official or public body, or by state or local law.

Want access to resources like sample bylaws, board member job descriptions, board policies, common board member forms, and board orientation? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

Minutes are business records of the organization. Minutes should be kept of all meetings of the Board of Directors, as well as committee meetings where the committee is making decisions on behalf of the board. Decisions of committees should be brought to the full board in regular reports. Minutes are not official until they have been approved by the Board (or committee) at the next meeting.

Board minutes keep all members informed of actions taken and those that need to be taken in the future. They should state who is in attendance, who presided at the meeting, when the meeting started and ended, and what actions (motions) were taken. The minutes may but need not include materials that would explain (briefly) the “why” of a decision. They should not include a recitation of all discussion that took place or any of the personalities involved. It is appropriate to have the person responsible for board minutes sign the minutes that have been submitted.

Even when the board is in Executive Session, the minutes should note the topic discussed and any decisions made during executive session.

The format of the minutes should be agreed upon by the board and not changed without another action by that body.

Maintaining board minutes in a consistent location allows minutes to serve as historical documentation for an organization. In some organizations, the secretary keeps a Minute Book which could also contain the bylaws and any documents of policies and procedures. It is also a good idea to keep a second copy of the minutes in another location or in electronic form.

Except where required by law, meeting minutes are not subject to public disclosure, although the Board can vote to make meeting minutes available to others.

Want access to resources like sample bylaws, board member job descriptions, board policies, common board member forms, and board orientation? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

There are a number of reasons for removing a member of the board of directors, including non-attendance at board meetings or committees, being inactive in general, or being so obstructive that he or she keeps the board from functioning effectively. The board should provide for the possibility of removal by addressing it in the bylaws.

There are several strategies that can be considered: term limits, personal intervention (preferably by the board chair), or removal by vote of the Board.

A sample bylaw clause is suggested here:

”A director may be removed, without cause, as determined by a two-thirds vote of the Board present at any meeting at which there is a quorum. In addition, any member of the Board of Directors may be removed for a substantial cause by the majority vote of the Board present at any meeting at which there is a quorum. Substantial cause shall include failure to participate in the activities of the Board of Directors as evidenced by the failure to attend at least three (3) consecutive meetings of the Board of Directors.”

Want access to resources like sample bylaws, board member job descriptions, board policies, common board member forms, and board orientation? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

Generally speaking, board members should not be compensated for their service as board members. In fact, the voluntary nature of nonprofit boards is one of the important elements of the nonprofit sector in the United States. Less than 1 % of nonprofit organizations across the nation provide compensation to board members for their service as board members.

The Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector® states, “Board members should serve without compensation for their service as board members.” Some nonprofits provide reimbursement to board members for their travel expenses or other direct costs of serving in this volunteer capacity. This is legal and entirely appropriate for many organizations. For example, a nonprofit that is national or international in scope may have board members who reside all over the country or world. For these members to gather for board meetings or other events, nonprofits may provide reimbursement for travel expenses.

It may also be important to mention that board members are sometimes compensated for activities or tasks outside their role as board members. For instance, a teacher on your board may be hired to teach a course for the nonprofit organization. Or, a lawyer on your board may be hired to develop a contract for the nonprofit organization. Since teaching classes or drafting contracts is not part of the individual’s governing role as a board member, it may be appropriate to compensate this individual for his/her work. Remember that any transactions between board members and the nonprofit must be properly reported on the organization’s annual Internal Revenue Service Tax Form, Form 990.

In addition, it is advised that nonprofits have a conflict of interest policy in place to guide and direct situations where a board member, staff member, or volunteer may enter into a transaction with the nonprofit. The conflict of interest policy should address the types of conduct that may be considered a conflict of interest, should include annual disclosure of interests, and should provide review of transactions by uninvolved board members.

Want access to resources like sample bylaws, board member job descriptions, board policies, common board member forms, and board orientation? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

Proxy Voting:

NO, board members (“directors”), who owe a fiduciary obligation to the legal entity, may not vote by proxy in Maryland. Maryland Code Section 2-408, “Action by Directors,” states that action by directors must be completed by “directors present at a meeting.”  Maryland code does allow for members (such as members of an association), to vote by proxy at general membership meetings.

Conference Call:

YES, in Maryland, boards may meet via conference call, and individual board members may participate in board meetings via conference call. All participants must be able to speak and hear each other simultaneously. This can be considered a regular meeting of the board.

Email Voting:

YES, BUT… Boards or committees may take action via written vote or email vote provided that there is written unanimous consent among the board members to take action without a meeting, and the unanimous consent is filed with the minutes of the board or committee. If your board intends to utilize this option for taking action without a meeting, it should be included in your bylaws.

Sample bylaws language to permit email voting:

ACTION WITHOUT MEETING: Any action which may be properly taken by the Board of Directors assembled in a meeting may also be taken without a meeting, if consent in writing setting forth the action so taken is signed or sent via electronic submission by all of the Directors entitled to vote with respect to the action. Such consent shall have the same force and effect as a vote of the Directors assembled and shall be filed with the minutes.

Want access to resources like sample bylaws, board member job descriptions, board policies, common board member forms, and board orientation? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

The board member selection process is often headed by the Nominating Committee or Board Development Committee, also called the Governance Committee. The board chairperson and Executive Director should also be closely involved.

As a first step in the selection process, a board should evaluate the skills, expertise, and demographic backgrounds of current board members to determine what characteristics they are lacking and would be looking for in future members. The board should also consider whether there are barriers in place (such as time or location of meeting, policies, or procedures) that may keep potential board members from the target demographics or expertise area from being able to serve.

A list of potential board members should be compiled based on how potential candidates may be able to fill these gaps. It is important that the board keeps in mind that a level of diversity and inclusiveness among board members must be maintained, and that potential candidates may need to possess certain characteristics or interests that are outlined in the organization’s by-laws.

Prospective board members can be suggested from various sources, including board and committee members, staff, self-nomination, and others. The board and its committees should maintain confidentiality in the selection and recruitment process.

Although the way in which new board members are recruited will vary from organization to organization, potential candidates should be interviewed, ideally by several board members. As part of this process, the expectations or job descriptions for individual board members should be shared and clearly outlined with candidates. In addition, the prospective board member’s interests and background should be discussed. A mutual understanding of the organization’s mission should be established and the role that the board plays in fulfillment of that mission should be clearly conveyed.

Board members may be elected to the board by the board itself (self-perpetuating); by a broader organization membership, if such exists and is given that power; or by nomination from a third party in accordance with the organization’s by-laws. Each organization should be sure to select new board members in a way consistent with its by-laws.

Want access to resources like sample bylaws, board member job descriptions, board policies, common board member forms, and board orientation? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

Having a sufficient number of board members to fulfill the board’s responsibilities, foster a viable organization, get through the federal approval process, and attract funding from foundations is important.

Nationally, the average board has 17 members. Maryland Nonprofits’ Standards for Excellence® code recommends that boards have at least 5 independent members and states that 7 independent members are preferable.

A small board can create several problems:

• There may not be enough people on a small board to complete all of the work.
• Important decisions may end up being made by a very small group. For example, in a board of 5 people, where the quorum may likely be set at three persons, a majority vote could occur with only two of the three attendees present.
• Small boards lack credibility in the eyes of funders, regulatory authorities, and other third parties.
• Small boards draw the attention of regulatory authorities, including the IRS. Applications for exemption (1023 applications used to obtain an organization’s 501(c)3 status) have been returned to the applicant by examining agents when it was determined that the organization did not have enough board members (usually when the applicant had fewer than five board members or just over five board members but some of the board members were related).
• Addressing conflicts of interest that may arise is much more difficult on a small board.
• A small board makes it difficult to attain the diversity that allows the board to be inclusive of the community that the organization represents.

On the other hand, an over-sized board can also create problems. Research shows that a large number of board members (25 or more) can lead to lower attendance, and lower levels of engagement since some board members assume others are carrying the load. However, neither state nor federal statutes state a maximum number of board members a nonprofit board may have.

Want access to resources like sample bylaws, board member job descriptions, board policies, common board member forms, and board orientation? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

Nonprofit organizations should adopt policies, approved by the board of directors, that provide clear guidance on a range of legal, financial, human resources and other areas. The Standards for Excellence® Educational Resource Packets provide a thorough set of instructions and sample policies for the attached list of policies and procedures, including:

• Conflict of Interest Policy
• Document Retention Policy
• Financial Management Policy
• Personnel Policies
• Solicitation and Acceptance of Gifts Policy
• Volunteer Policy
• Whistleblower Policy
• Other policies referenced in Form 990
• … and more!

Want access to these sample policies? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.