When you talk about duties of charitable organizations there are essentially three basic duties of the director.
The three main duties are the duty of care, the duty of loyalty and the duty of obedience. The role of the board of directors of a charity is similar to the role of a for profit board. In both cases the organizations are tasked with managing other people’s money and in both cases they are judged by their success in doing so. But there a big key difference – in the for profit context shareholders are able to hold corporate directors and officers accountable, whereas in the charitable context there is no mechanism by which the organization can be held accountable when is fails to act in furtherance of its mission. Although the government plays an important role in policing and monitoring charitable activities, there is no private right of action available against officers and directors to ensure accountability. The charity board is required to fill this void by ensuring that the organization acts in accordance with its mission through meaningful oversight of operations and policy guidelines in a way that assures integrity and effective management, but without leading to board involvement in the organizations day to day activities. Watch this video for details on the three main duties that directors must maintain.
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