While charitable organizations in New York State vary greatly in size and purpose, the law imposes the same responsibilities on all board members of these organizations.  Many legal and financial problems occur when members are not aware of their rights and responsibilities.  As directors, board members have a legal and moral obligation to keep themselves fully informed about the organization, its finances, and its total operations.

Each New York not-for-profit corporation must be governed by a board of directors consisting of not less than three persons. These directors are entrusted with the overall management and oversight of the corporation and must maintain certain standards of conduct in the exercise of these fiduciary duties.

The State of New York Office of the Attorney General (OAG) defines these duties as the duties of "care, loyalty, and obedience".

Under the "duty of care", the OAG states that "a director must be familiar with the organization's finances and activities and participate regularly in its governance".  In exercising this duty, the board members should, at a minimum, attend board and committee meetings, read the minutes and reports of all meetings, insure that proper written internal policies and controls are in place to protect the organization's assets, and engage in careful oversight of the organization's finances.

The "duty of loyalty" requires that directors act in the best interest of the corporation.  In order to exercise this duty, directors must examine transactions that could create a conflict of interest.  The board must not approve any transactions that are not fair and reasonable to the corporation.

According to the OAG, the third duty that a director possesses is a "duty of obedience". This is a duty to insure that the corporation complies with all appropriate laws, including dedicating the organization's resources to its mission and insuring that the corporation carries out its purpose and does not engage in unauthorized activities.

As a board member, you have the right to ask questions and have the responsibility to learn as much as you can about your role, responsibilities, and functions.  The following is a general list of items to assist in being an effective board member:

·         Know and support the organization's beliefs, vision, mission, target, and aims statements

·         Attend all board meetings and assigned committee meetings

·         Read pre-meeting material before each meeting

·         Be familiar with the board's policies

·         Be familiar with the minutes of the board and assigned committees

·         Know the responsibilities and functions of the board and its committees

·         Know who is authorized to sign checks, and for what amounts

·         Monitor the community's response to the organization's programs and services

·         Participate in approving the annual budget, audit, annual financial report, and periodic financial statements

·         Approve, and annually review, personnel policies

·         Maintain up-to-date contracts with the executive director and staff

·         Purchase adequate insurance

·         Develop written job descriptions for board members  

The leadership of all organizations, including not-for-profit organizations, is ultimately responsible for the culture of the organization and its membership. A strong ethical organization is only possible when it is governed by a strong ethical board; in turn, the strength of the board is determined by the ethical conduct and approach of each of its board members.