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If your nonprofit board acts in a way that is contrary to the state and federal laws, the board can be held legally liable. The ultimate legal responsibility for the actions and inactions of the nonprofit board rests with the board. That is why it is extremely important that all board members must have a clear understanding of their legal and fiduciary duties. There are mainly three main duties: 1. Duty of Care. 2. Duty of Loyalty. 3. Duty of Obedience.

• Duty of Care

This duty requires board members to exercise ordinary and reasonable care in the performance of their duties. Their acts must be for the best interests of the nonprofit. Some of the examples of the duty of care may include:

1. Attend meetings. Failure to attend may be considered a failure to carry out fiduciary responsibilities.
2. Be fully informed about the financial status of the organization.
3. Be fully informed about the mission and vision of the organization.

• Duty of Loyalty

A board member shall not be motivated by business, personal, or private interests but by what is in the best interest of the organization. Self-dealing is a form of disloyalty. A good conflict of interest policy can help board members remain loyal to the organization.

• Duty of Obedience

A board member must remain faithful and obedient to the mission and goals and of the organization and comply with state and federal laws.

I highly recommend that every board member must be familiar with the bylaws and financial documents of his/her organization. Review your tax returns, read your meeting minutes, attend your meetings and events, and review your conflict of interest policy.

The information provided in the above article does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this page are for general informational purposes only.