THE ROLE OF A BOARD MEMBER

Transcription

1 THE ROLE OF A BOARD MEMBER While the board of directors functions as a body in its deliberations and policy-level decisions, its members are elected as individuals. Each individual board member must accept the mission and goals that support the organization. Board members are responsible for seeing that these goals are reflected in the decisions they make. Decisions made by the board also should reflect the concern for and knowledge of theatre s total needs. Board members should understand and accept the role of a policy-maker as different from the role of carrying on day-to-day operations. Attending board meetings is only a part of a board member s responsibility. An individual must become well informed about the work of the board and should be prepared to challenge and to ask discerning questions. Before decisions are reached, all points of view should be fully explored, even at the risk of creating displeasure and possible consequences of each decision should be considered. Each board member, regardless of personal point of view, is responsible for supporting the decisions of the board publicly. Legal actions against board of directors of not-for-profit corporations have led to an increased awareness of the need for the individual board members to be alert to his/her conduct when making key decisions for the corporation. No individual board member, regardless of knowledge, expertise, or community contacts, has any right or authority to act upon his/her own in the name of the corporation unless delegated specific authority by the board of directors. As individuals, board members have the responsibility to take the initiative to resign from the board if they find themselves unable to fulfill their commitment of regular attendance and participation in board meetings, or if they do not feel able to support the decisions made by the board of directors. Although individual board members very often work in the productive partnership with employed staff members, it is not prudent for individuals or for the board as a whole, to become involved or to interfere in problems dealing with the staff members. Decisions relating to the release of staff and disciplinary problems are in the domain of the President/CEO. It is his prerogative to seek advice form the board in handling these problems. Although the board of directors determines personnel policies, sets salary ranges, and adopts salary budgets, it does not concern itself directly with individual salaries or the administration of staff salaries. The President/CEO determines individual salaries, amount of salary increases, and vacation schedules and sees that each individual staff members sets annual performance goals. A major responsibility for each board member is to participate actively in developing the theatre s financial resources by making a personal financial contribution and influencing contributions from others. Although not personally involved in preparing the details of the budget, board members should understand the budget-building process as it relates to the goals and objectives and to financial reports and the annual audit.

2 Below is a checklist for individual board members to use in monitoring their own performance as directors. Accept the organization s mission statement and objectives Be willing and available to attend orientation and/or training Be a season subscriber Read material in board mailings prior to attending meetings Attend all board meetings Participate actively in board discussions and debates Keep the board s work confidential until such time as it is released Know the theatre s financial position and budgets well enough to assess the impact of board decisions on the financial condition Support and promote the theatre s funding efforts Support the majority decisions of the board Understand the boards legal responsibilities and be alert to the legal implications of board actions Abstain from any action that might lead to or be perceived as a conflict of interest Refrain from becoming involved in staff conflicts

3 MAJOR FUNCTIONS OF THE BOARD OF DIRECTORS In carrying out its responsibilities, a theatre board of directors functions in seven major areas: Fulfilling corporate obligations Policy-making Relating to the President/CEO Strategic Planning Fund Development Financial Management Community Interaction In carrying out these functions, a board of directors makes some decisions reserved exclusively to it and assumes the legal responsibility for its actions. FULFILLING CORPRATE OBLIGATIONS Within this function, the theatre board of directors fulfills its corporate obligations as required by local, state and federal law. Under state corporate law, the board of directors is granted numerous powers which are defined in the articles of incorporation and in the bylaws that specify board actions such as: the replacement of officers and directors approval for the acquisition of disposition changes in the corporate structure When action by the members of the corporation is required to amend the articles of incorporation and bylaws, the board of directors has the responsibility to initiate action for revision. A board of directors must be familiar with federal legislation and regulations affecting not-forprofit organizations such as the IRS code and laws concerning equal employment opportunity, and see the theatre adheres to them. Inherent in the corporate function of a board of directors are prudent management, and the safeguarding of American Musical Theatre as an art form, and theatre assets. POLICY-MAKING The board of directors is the sole policy-making body. Although the board may solicit input and reactions from policy-influencing groups, such as board committees and advisory boards, before it makes a policy decision that will have and impact on the entire organization, it alone makes the final policy decision. Policy-making requires that a board of directors deal thoughtfully with issues that affect the future of the theatre. Therefore, policies need to reflect wise utilization of human, property and fiscal resources. The policies the board makes govern all of the activities of the theatre. The policy-making function includes regularly reviewing the theatre policies and ensuring that policies are clearly understood by volunteers and employed staff members.

4 RELATING TO THE PRESIDENT/CEO The corporate board of directors carries the responsibility for the selection, appointment, ongoing performance evaluation, and release (when necessary) of the President/CEO. When a search is being made for a President/CEO, the board must determine the job focus, qualifications needed and criteria needed for selection. In addition, the board establishes plans and compensation schedules. The President/CEO gives direction to the planning process and directs al of the operational work in the theatre. The board of directors has the responsibility for monitoring progress toward the achievement of the operating objectives and the corporate goals. This monitoring is facilitated by regular management accountability reports presented to the board by the president/ceo at stated intervals determined by the board and through an annual performance review of the President/CEO. This review is conducted by the Chairman. However, the President/CEO may include other officers in the review group if he/she so chooses. The Chairman presents a summary of the highlights of the performance review to the board. Our President/CEO has been designated as an officer and director for the board with vote. He has an obligation to provide information to the board as needed for decision-making. Board decisions that must be carried out by staff should no be made without input from the President/CEO. STRATEGIC PLANNING One of the most important and challenging functions of the corporate board of directors is to carry out the strategic steps in the corporate planning process adopting the theatre s corporate goals. Implicit in the strategic planning function are the regular review and appraisal progress toward achievement of the corporate goals. This area of decision-making is retained solely by the board of directors. Strategic planning is oriented toward the future. It gives direction to the acquisition and disposition of resources based on internal trends and the external environment. Strategic planning forms the base upon which the President/CEO organizes staff members to work toward the achievement of the corporate goals. By adopting the corporate goals and setting the major policies related to the theatre s resources, the board of directors exercises its stewardship responsibility for its resources. The board, in its sole discretion, also determines major strategies, based on the corporate goals. Some examples are major fund-development efforts and partnering with the Hobby Center on select productions. The board also approves the annual integrated objectives and operating budget, which become the controlling mechanisms for the organization. Although the board of directors approves the integrated objective and budget, both are developed by those persons involved in carrying out operations and are presented to the board by the chairman of the Finance Committee and the Chief Operating Officer.

5 FUND DEVELOPMENT The board of directors is responsible for obtaining financial support from the community that it serves. Boards must be aware of community needs to ensure that the theatre s productions and activities will merit public support. It is critical for board members to be committed to every fund-raising method employed by the corporation. The board must evaluate sources of income on an ongoing basis. The board not only must ensure that there is enough income to meet present needs of the corporation, but must see that a foundation is laid to ensure sufficient funding for the theatre s future. All members of the board must make a financial contribution and identify and cultivate sources of support, and be willing to ask for gifts. FINANCIAL MANAGEMENT The board s role in financial management of the organization is an ongoing fiduciary responsibility for stewardship of monies provided by the community for operations and capital expenditures. Although board members are not involved in the day-to-day business of preparing budgets and financial statements, every board member has the responsibility to know the budget, including the sources of public support and revenue as well as expenses. Every board member should understand the implications of each board decision for both operating and capital budgets, and also for the present and future financial condition of the corporation. The board has and obligation to request that budgets and financial reports be clear and be appropriate for the scope and type of the theatre s operation. COMMUNITY INTERACTION Through the approval of plans and budgets, the board provides for promoting American Musical Theatre and collaborating with others in the community. It organizes its work in such a manner as to involve other community leaders in the theatre, thus providing for continuous renewal of theatre leadership. Board members can strengthen the theatre through participation in community networks.