The board of directors of most charities are made up of good-hearted volunteers who are passionate about the charity’s exempt mission and eager to donate their time and experience.  Before agreeing to serve, however, a potential board member must understand the fiduciary duties that they will owe to the charity as a member of the board, including the duty of care, duty of loyalty, and duty of obedience.   The following is a brief overview of the duty of care.  A brief discussion of the duty of loyalty and duty of obedience will follow in subsequent blog entries.   

To satisfy the duty of care, a board member must discharge his or her duties as a director in good faith, with the care of an ordinarily prudent person and in a manner the director reasonably believes to be in the best interests of the charity.  This means, among other things, the director should pay attention to fiscal matters, conscientiously decide matters that come before them, create and enforce internal information systems, and serve as a check or veto on management. Some helpful suggestions include, but are not limited to, the following:

  • Conduct regular meetings
  • Attend meetings
  • Review and record all board actions in written minutes
  • Exercise general oversight over the organization’s programs and activities
  • Exercise financial oversight – Conduct regular review of financial information and records
  • Make informed decisions: Obtain necessary information, seek outside professional advice if necessary
  • Confirm proposed actions are permitted by law, as well as the charity’s Articles and Bylaws