Tag: executive director

Non-Profit Board Membership: The Advantages and Realities

Serving on a non-profit board can be an experience beyond compare and offer a chance to develop leadership skills, make a meaningful contribution to something larger than yourself and cultivate new personal and professional connections. That said, before you seek out or join a board, it is critical to understand the advantages and realities of board membership.

shutterstock_337000853 (board)

Serving on a non-profit board can be an experience beyond compare and offer a chance to develop leadership skills, make a meaningful contribution to something larger than yourself and cultivate new personal and professional connections. That said, before you seek out or join a board, it is critical to understand the advantages and realities of board membership.

A number of my clients are interested in non-profit board membership, including those who wish to “start the year out right” and add a new board membership in the first quarter of next year. In this post, I have compiled a list of articles and resources to help my clients and readers understand some important points about non-profit boards, specifically:

  • what makes you an attractive candidate for non-profit board membership or leadership, 
  • how your board résumé should differ from a straight employment résumé (hint: highlight volunteer work, former board memberships (if any) and transferrable skills the organization needs), 
  • how being on a non-profit board can help ease the transition into a leadership role at a non-profit organization (from the corporate world) or a for-profit board, if either of these is a goal, and 
  • the advantages and realities of board membership.

The key point to make is that non-profit organizations are often run very differently than private companies, and joining a non-profit board for which you are not passionately aligned with the cause generally results in a negative experience – on both ends (for the board member and the non-profit organization). A second point is that not all non-profits and, by extension, their boards are alike. If you are already very familiar with the non-profit world this is obvious, but if you are approaching non-profits without much direct experience, be ready to objectively evaluate the board, separate from your commitment to its mission, including:

  • expectations of members (including financial support or fundraising),
  • board members’  sophistication,
  • how the Executive Director and major donors interact with the board,
  • how effectively the organization utilizes the time and talents of board members,
  • any inter-board rivalry, departure from mission or disagreements,
  • dates and times of meetings, committees and other obligations, and
  • “scalability” of the organization, if appropriate,
  • major funding sources and how certain are they to remain so (and if the non-profit has identified alternatives),
  • financials, corporate governance and compliance (start with the Form 990 and ask more questions from there), and
  • who its competitors and potential/current collaborators may be, who is providing similar services (more generally), how cognizant the board is about these points and how they affect service to beneficiaries of the organization’s mission.

If you are considering joining a non-profit board, the best thing you can do is to educate yourself about the organization, what it means to be a board member and who will be joining you on the journey (including the Executive Director, senior staff, donors and fellow board members).

Here are some additional articles and resources with a range of topics and viewpoints on non-profit board candidacy and membership:

Nonprofit Boards: How to Find a Rewarding Board Position (Bridgespan)

Find and Join a Nonprofit Board (Bridgespan)

How to Get a Seat on a Nonprofit Board (Forbes)

Ten Things Boards Do Right (Without Even Realizing It) (Blue Avocado)

Ten Biggest Mistakes Boards and Executives Make (Blue Avocado)

Community Resources: Joining a Nonprofit Board and Other Resources (BoardSource)

Board service (Idealist)

Before you join that board… (Wall Street Journal)

How to Be a Better Nonprofit Board Member (Stanford Business)

Nonprofit Board Basics Online (CompassPoint)

Board Roles and Responsibilities (National Council of Nonprofits)

General nonprofit information and updates (Guidestar)

Want a seat on a board? Rewrite your resume (Fortune) (note: addresses for-profit board positions, but many of the ideas are applicable to non-profit boards as well)

Note: In addition to the above, if you are a professional with specific expertise that is useful to a board, such as an attorney, accountant or CFO, consider how much the Executive Director and other board members will ask for direct legal or financial advice versus consulting outside advisors (and whether you are comfortable giving it – ethically, liability-focused and otherwise – as a board member) as opposed to simply relying on your general expertise and management of those advisors. Smaller boards often like to have a “legal person” and a “finance person” on their board in order to leverage such experience and ferret out red flags, which is very helpful. Sometimes, however, this crosses over into you being asked to provide legal advice or expected to “pass on” numbers, which should be outside of the scope of your fiduciary duties.

If you are actively pursuing a board position, it pays to be open to more than one organization and consider the tradeoffs of each, as well as what you would bring to the table. In addition, remember that seeking out a board is similar in some ways to a job search, referrals and endorsements go a long way, as well as personal connections. The ball may be in your court to make the contacts – and to follow up – even if the board has expressed an interest in having you join. In addition, don’t forget to let your LinkedIn network know that you are interested in a board position and your relevant experience (by including it on your profile), as non-savvy profits may also source board members on LinkedIn.

The above resources will get you started and on your way to discovering the inner workings of board selection and membership, including advantages and pitfalls to avoid. As a final point, which cannot be emphasized enough, only join a non-profit board if you are devoted enough to its cause that you can tough it out through the minor (or major) aggravations that may arise over time. That said, board membership is an important and very needed form of skilled volunteership in our society, so if you have the skills and willingness to move forward, by all means, seek out a board!

Anne Marie Segal is a career and leadership coach and résumé writer to attorneys, executives and entrepreneurs. You can find her website at www.segalcoaching.com.

WRITING SERVICES include attorney and executive résumés, cover letters, LinkedIn profiles, bios, websites and other career and business communications.

COACHING SERVICES include career coaching, networking support, interview preparation, LinkedIn training, personal branding, leadership and change management.

Becoming a Corporation: How to Transition from “Me” to “the Company”

[Note: This post was written while I was a practicing attorney running a solo law practice. Since April 2015, I have been working with attorney, executive and entrepreneur clients as a career coach and writer, and I am not currently available for legal engagements.]

A client of mine recently received her filing receipt evidencing incorporation in the State of New York. Her astute next question was “now what?” She had been carrying on business in her own name and wanted to know how to begin conducting her activities as a corporation.

She was asking, in other words, “how do I transition from me to the Company?”

This is a great question. I am sure that, by knowing to ask it, this client is off to a great start. One of the most important features of a corporation is that is generally offers limited liability, so corporate protocol must be followed to make sure the corporate structure is respected. This is often called “i’s” dotted and “t’s” crossed. In practice it means, among other things, that:

– company and individual activities are kept separate (especially in cases where money is involved),

– the company’s board of directors (“Board”) and officers do what is expected of them (and each individual role is respected), and

– the company follows the direction of the Board and Chief Executive Officer or, as this title may be designated at a nonprofit entity, Executive Director.

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Here are some of the important, initial steps you will need to take. There may be others in your home state and for your particular entity and activities, but these are generally universal:

1) If you were the sole incorporator and have not yet elected a Board or have until now filled all roles, you will need to elect your Board. It is generally preferable to have at least five Board members, although you can start with a smaller Board and expand if you only have a small core group of dedicated directors at the beginning. Choosing your Board is one of the most important decisions of a young organization. You should give careful consideration to who will best advance the organizations’s goals and take their roles and duties seriously.

Electing the Board – or expanding the Board – is done at an organizational Board meeting and recorded in the minutes of the meeting. Alternatively, Board members can be elected by unanimous written consent of the Board.

2) The Board, in its organizational meeting or via written consent, will also elect officers of the corporation. Core officer roles are generally President, Secretary and Treasurer. A Vice President is also commonly elected to serve as an alternate to the President. In some states, these roles can all be filled by one individual, although generally that is not recommended to avoid potential conflicts of interest and provide for good corporate governance.

3) If you have already undertaken activities in your individual name or as an incorporator – such as incorporate or make some initial payments to third parties – it may be that the Board needs to review and ratify your prior actions. For example, the Board would ratify and approve the incorporator(s)’ act of forming the corporation.

If your prior activity has been substantial, it is possible that that only certain activities should be ratified, and this may depend on the nature of the activity and ongoing relationships. At the same time, if there are contracts in your individual name that should now belong to the company, these may need to be assigned to the corporation or terminated. It can get complicated if there has been substantial activity or in certain circumstances, so if you have any doubt, speak with a business attorney about how to sort this out.

4) The Board should also authorize other important actions to be undertaken by officers of the corporation, such as applying for an Employer Identification Number (EIN) and opening a bank account. (Note that the IRS now allows a company to apply for its EIN online. Click here.)

5) The newly-formed corporation should also draft and adopt bylaws, which the Secretary of the corporation will insert into the minute book along with the Certificate of Incorporation, all board resolutions and other important corporate documents. I suggest to my clients that they keep an electronic copy of all documents as well as paper copies, even if the laws of their home state allow for only electronic versions. In the digital database, care should be taken to name files in an identifiable manner and to keep the documents secure. The contents of the bylaws should reflect what the corporation will actually do – not simply be copied from a form – and it is a best practice to have a copy at Board meetings to which the directors can refer if needed.

6) State and local tax law matters and registrations need to be addressed.

7) The corporation should put basic policies in place, such as a conflict of interest, whistleblower and document-destruction policies. Over time as the company grows, these policies may be worked into an employee handbook.

8) The corporation should hire an accountant or bookkeeper – or designate someone with expertise from within its ranks – to keep track of revenues and expenses as well as tax and other deadlines.

The above steps provide an overview of certain important first steps for a new corporation. Depending on the nature of the organization, there may be other important steps to consider, but as a minimum these steps should be followed. As discussed above, these are not simply “formalities” but rather will allow for effective governance of a corporation and go a long way toward preserving limited liability for its directors and officers.

None of the information posted on this site constitutes legal advice or forms an attorney-client relationship, and there may be facts not discussed here that are relevant to your situation.