What Every Board Member Should Know

From Carol White, Associate Director for Operations –

Tennessee’s arts and culture nonprofits depend on their boards, dedicated citizens who embody our state’s great volunteer tradition. Board members can be most successful when everyone is crystal clear about the statutory bedrock duties of good faith, loyalty and care.

Consider using the information below for your board member orientation from the publication, What Every Board Member Should Know: A Guidebook for Tennessee Nonprofits published by Tennessee Secretary of State, Tennessee Attorney General and Center for Nonprofit Management.

Speci­fically, Tennessee law imposes upon nonprofit board members the duties of good faith, loyalty and care:

  • Duty of good faith means that you must act in good faith, and be fair in your dealings with your nonpro­fit. You must not take advantage of your organization and its resources. You must be upfront and honest in your dealings with the nonpro­fit, and in ful­filling your other fiduciary obligations.
  • Duty of loyalty means that you must act with undivided loyalty in the best interests of your nonprofi­t organization and that you not seek to benefi­t personally from the activities or resources of the nonprofi­t you serve. In the event that you have a conflict of interest between the best interests of the nonprofi­t and your own interests, you must comply with Tennessee law in resolving this conflict. Actions that benefi­t you at the expense of your nonprofi­t are a breach of your fiduciary duty.
  • Duty of care means that you must act reasonably, as a prudent person in similar circumstances would, that you are familiar with the nonprofi­t’s activities and fi­nancial condition, and that you participate regularly in board meetings. It is the job of the governing board to oversee the work of the chief executive officer of the nonprofi­t and to make sure that the organization is faithfully carrying out its charitable purpose without extravagance or waste.

Read the full guidelines