Board Structure

This summer throughout my board governance course at James Madison University we talked a lot about different things that nonprofit boards should do, how they should be set up, and what governance model they should implement. No matter how we thought about any of these practices, we eventually came around to determining that there are times when this does not apply. In the end, as a colleague of mine stated during the course, everything is contingent. I think contingency theory is the only thing that remained constant in this course. However, I am going to show how I believe a committee structure should look for every nonprofit board. 

The structure that I am going to present does not suggest that other committees cannot be added, however I do not believe you can take away any of the committees. The first committee that I believe to be a standing committee is the Executive Committee. The executive committee is comprised of the officers of the board and is responsible for determining what matters are brought to the board. 

The second committee that I believe should be a regularly standing committee is the Finance Committee. The finance committee is responsible for ensuring that the organizations financial books are balanced and accurate. They are also responsible for the development of the organizations budget. At the end of each fiscal year, the chair of the committee, who is typically the treasurer is responsible for developing an ad hoc audit committee. The ad hoc committee is not a standing committee because after the audit is complete, there is not a reason for this committee to meet again until the next audit. A key note on audit committees is that they do not have to consist of members of the larger committee or even board members for that matter.

The third standing committee compliments the finance committee and that is the fundraising committee.This committee is responsible for raising the amount of funding that was set by the finance committee for the organization. They will develop several ad hoc committees if they hold special events (one committee for each event and then they disband at the end). In order for this group to truly be successful it must rely heavily on outside members to serve on the ad hoc committees. It is rare that an organization has enough board members to plan and prepare all of the events for an organization. When a nonprofit boards tries to do this without outside help they typically will have hig turnover rates of board members because of burn-out. 

The fourth committee that should be a standing committee is the operations committee. The operations committee covers all aspects of the organization in terms of the delivery of programs and building related issues. The ad hoc human resource committee is also in this category, they are responsible for forming the policies and procedures for employees. This committee will also ensure that the organization has all of the necessary insurance for the organizations operations. 

The final committee is the board governance committee. The board governance committee is responsible for the orientation and training of all board members. They are also responsible for recruiting new board members. This committee will form the policies and procedure that the board will adhere to, they also are responsible for the insurance that is required for directors of an organization. 

The committee structure above will allow the organization to run efficiently. Without many of these committees the responsibility will flow to the staff of the organization without any oversight into the matter. If the board does not oversee every aspect of the nonprofit, it will leave you questioning who is actually in charge?