Legally boards are required to ensure that the organization accomplishes its goals and has a sound plan of action and doesn’t fall into financial or legal problems. The way boards perform their duties differs greatly and is dependent on the particular circumstances.
A common error is that boards get involved in operational issues that should be left to management, or they are unclear about their legal responsibility for the decisions they take and the actions they make for the benefit of the organization. This confusion is usually caused by not keeping up with the changing requirements on boards or the unexpected issues like financial crises and resignations of staff. It is often resolved by taking the time to talk about board portals for nonprofits the challenges facing directors and supplying them with simple written materials and an orientation.
Another common mistake is that the board over-delegates its authority and decides not to examine the issues it has delegated (except for the tiniest of NPOs). In this scenario the board loses its evaluation function and cannot assess whether the activities of the organization contribute to a satisfactory performance of the organization.
The board should also create an effective governance system, including how it will interact with the general manager or CEO. This includes the decision-making process for the frequency of meetings and the manner in which members are chosen and removed, and the manner in which decisions are made. The board must also establish information systems that offer valid information on the past and future performance in order to assist in making its decisions.