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.