Nonprofit organizations depend on the dedication and ethical conduct of their board members to achieve their missions effectively. Nonprofit board members are entrusted with three fundamental legal duties: duty of care, duty of loyalty, and duty of obedience.

Duty of Care

The duty of care requires board members to conduct the affairs of the organization in the way a prudent person would. Board members are expected to make reasonable and sound judgements. This includes but is not limited to attending board meetings regularly and preparing thoroughly for discussions and important decisions.

Duty of Loyalty

The duty of loyalty requires board members to prioritize the nonprofit’s interests above their own. This duty encompasses disclosing any conflicts of interest and abstaining from decisions where personal interests may conflict with those of the organization.

Upholding confidentiality and never using insider information for personal gain are integral to fulfilling this duty. A robust conflict of interest policy is essential to managing these ethical considerations transparently.

Duty of Obedience

The duty of obedience requires board members to be faithful to the mission of the organization. It is the board’s responsibility to ensure compliance with all applicable laws and regulations. This includes honoring donor intentions and avoiding actions that deviate from the organization’s stated mission or legal obligations.

To effectively fulfill these duties, nonprofit board members should stay informed of emerging challenges relevant to the organization’s mission, legal obligations, and best practices in nonprofit governance.