Recruiting effective board members is crucial for its success. Boards are often relied on heavily or seasonally; this is dependent on context and needs. Some boards are strategic to ensure the road taken is getting to the strategic goals, including growth or risk management. Discussed here are a few key similarities and differences between a nonprofit board and a business board, as well as the process required to recruit effective board members.
Nonprofit Organization
A nonprofit board is accountable for guiding the organization’s overall direction and sustainability and survival. Strategic planning a key responsibility, which states the mission, vision, and long-term goals aligned with the organization’s purpose, and ensuring their proper implementation. Besides making strategy decisions, the board ensures the governance and management necessary by ensuring compliance with legal and ethical factors, monitoring financial management, and careful organisational policy. Members of the board also have crucial fundraising and development responsibilities, many a time becoming involved in the activities of building donors, grant proposal preparation, and events that acquire necessary resources for programmes and initiatives. Just as critical, though, is their role as advocates and community representatives for the organization, representing the organization in developing relationships with stakeholders, engaging with the public, and sharing the organization’s purpose with the broader community. Lastly, the board supports and assists the executive director or CEO, offering advice, conducting performance evaluations, and having strong, effective leadership in place to guide the organization into the future.
Business
In a business setting, the board of directors have a very significant role in guiding the company’s strategic direction and long-term success. Like in the nonprofit sector, the board outlines the overall strategy, objectives, and goals of the company, monitors industry trends, assesses risks, and makes key decisions that propel growth and profitability. Management of finance and operations is another core responsibility, with the board being responsible for budgeting, financial reporting, compliance with regulatory obligations, and risk management to ensure the company is operating successfully and financially well. The board is central to executive-level leadership as well by appointing, evaluating, and approving compensation for the CEO or executive management team and advising to ensure management decisions are in line with the company’s goals and shareholders’ interests. In listed companies, effective shareholder relations are important—the board communicates with shareholders, hears their concerns, and works to maximize shareholder value. Finally, the board maintains legal and ethical compliance by ensuring that the company is legally compliant, having corporate governance policies in place, and maintaining transparency, accountability, and integrity within the company.
Differences
While the roles of boards in nonprofit organizations and businesses have similarities, such as setting strategic direction and providing oversight, they also have distinct focuses and priorities based on the unique missions, stakeholders, and operating environments of nonprofits and businesses.
| Category | Nonprofit Board | Business (For-Profit) Board | Similarity/Difference |
| Strategic Direction | Sets mission, vision, and long-term goals aligned with social impact | Sets company’s strategic goals and direction focused on growth and profitability | Similarity – Both set strategy |
| Oversight Responsibilities | Ensures legal/ethical compliance, monitors financial and risk management | Oversees financial reporting, risk, operational efficiency, and regulatory compliance | Similarity – Oversight roles |
| Executive Leadership | Hires, evaluates, and supports the Executive Director/CEO | Hires, evaluates, and compensates the CEO/executive team | Similarity – Leadership role |
| Compensation Oversight | Often volunteer board; may set ED/CEO salary with funding transparency | Determines and approves executive compensation based on performance and shareholder interests | Difference – Business focuses on competitive compensation |
| Fundraising | Actively participates in fundraising through donor outreach, grants, and events | Typically does not engage in fundraising; revenue is generated through business operations | Difference – Unique to nonprofits |
| Stakeholder Engagement | Engages with community, donors, and policymakers to advance mission | Engages with shareholders and investors to ensure accountability and maximize value | Similarity – Stakeholder focus, but different types |
| Profit Orientation | Mission-driven; surplus reinvested into programs and services | Profit-driven; surplus distributed to shareholders | Difference – Core purpose |
| Accountability | Accountable to the public, donors, and regulatory bodies | Accountable to shareholders and financial markets | Difference – Different accountability structures |
| Ethical Standards | High focus on transparency, ethics, and community trust | Also promotes ethical conduct and corporate governance | Similarity – Ethical compliance |
How do you define your needs and recruit strong members?
Below is a preliminary checklist for recruiting appropriate, strong and effective Board Members. If you would like help implementing this process in a convenient and simple way, get in touch with us today.
There are an endless array of tools to help streamline and create efficient systems, they can include, recruitment platforms, social media, volunteer platforms, emailing marketing, and professional networks, affect job descriptions, application forms, and process for qualification and on-boarding. Ask us what tools might help you achieve any one of these goals.
A Checklist for Recruiting Board Members
- Define Board Needs
- Identify the skills, expertise, and diversity needed on the board.
- Consider the organization’s current and future challenges.
- Create a Board Profile
- Develop a detailed profile outlining the ideal board member’s qualifications and attributes.
- Network and Outreach
- Leverage your personal and professional networks.
- Attend industry events, conferences, and workshops.
- Use social media platforms to spread the word.
- Engage Current Board Members
- Encourage existing board members to refer potential candidates.
- Leverage their networks for recommendations.
- Utilize Online Platforms
- Use dedicated platforms like BoardSource, LinkedIn, Idealist, or Bridgespan to post board positions.
- Tap into Volunteer or Social Impact Networks
- Connect with local volunteer organizations.
- Attend volunteer fairs or organize your own.
- Collaborate with Professional Associations
- Engage with professional organizations related to your nonprofit’s mission.
- Screen and Interview Candidates
- Develop a screening process to evaluate candidates.
- Conduct interviews to assess skills, commitment, and alignment with the organization’s values.
- Provide Informational Sessions
- Host informational sessions for potential candidates to learn about your organization.
- Reference Checks
- Conduct thorough reference checks to verify the candidate’s background and reputation.
- Board Orientation
- Develop a comprehensive orientation program for new board members.
- Evaluate Regularly
- Regularly evaluate the performance and contributions of board members.
Tailoring the approaches and tools based on the specific needs and characteristics of your organization is an important part of success. Effective board recruitment involves a combination of networking, strategic outreach, and thorough evaluation to ensure alignment with the organization’s mission and goals.
If you wish to Inspire, Innovate, Impact, contact us today!
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