Legally boards are required by law to ensure that the organization is able to fulfill its mission and has a sound strategy and doesn’t get into legal or financial problems. The manner in which boards fulfill their responsibilities varies greatly and is highly dependent on the specific circumstances.
A common mistake is that boards get too involved in operational matters which should be left to management, or that they aren’t aware of their own legal responsibilities for the decisions they make and the actions they undertake on behalf of the organization. This confusion often results from not keeping up with ever-changing demands placed on boards, or from unexpected issues like unexpected financial crises and staff resignations. Usually, this can be remedied by taking time for discussion of the issues faced by directors and by giving them instructions and a simple set of documents.
Another common error is that the board is able to delegate its authority and decides not to review the issues it has delegated (except in the most small of NPOs). In this instance the board is no longer able to perform its evaluation function and can no longer assess whether these operations contribute to satisfactory performance for the organization as a whole.
The board should also develop the governance structure, which includes how it will interact with the general manager or chief executive officer. This includes determining how the board will meet regularly, how members will be selected and removed, and how the board will make decisions. The board must also develop information systems that offer information about their past and anticipated performance to help them make decisions.