Legally, boards are required to ensure that an organization achieves their mission, has a solid strategy and doesn’t run into financial or legal problems. However, the method by which boards take on the exercise of their duties can differ dramatically and is largely dependent on the circumstances of the organization.
A common mistake is that boards get too involved in operational matters that should be left to management, or they are unclear about their legal obligations for the decisions they make and the actions they take for the benefit of the organization. This is often due to not being able to keep up with the ever-changing demands placed on boards, or from unanticipated issues such as unexpected financial crises and staff resignations. This is usually resolved by taking the time to discuss the challenges facing directors and providing them with simple, written materials and an orientation.
Another common error is when the board is able to delegate its authority and chooses not to look into those matters that it has delegated (except in the smallest of NPOs). In this case the board is unable to carry out its ability to evaluate and no longer assess whether these operations contribute to a satisfactory performance for the entire organization.
The board also needs to develop a governance system including how it interacts with the general manager or CEO. This includes determining how the board will meet regularly, the manner in which its members will be chosen and removed, and the manner in which the board will make its decisions. The board also needs to develop information systems that are able to provide accurate information about its past and future performance to support its decision-making.