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Frequently Asked Questions

What are the fiduciary duties of board members in a non-profit organization?

The fiduciary duties of board members in a non-profit organization are threefold: care, loyalty, and obedience. These duties require board members to make decisions in good faith that align with the best interests of the organization and its mission, independent of any undue influence or personal financial interests. The duty of care mandates board members to perform their responsibilities with the diligence and skill of an ordinarily prudent person in a similar position. This includes making important decisions such as appointing and recruiting new board members, hiring and firing managers and staff, conducting an annual audit, and monitoring financial reports. The duty of loyalty requires board members to act in good faith and put the interests of the institution before any personal interests or those of another person or organization. They must not act out of greed or convenience. The duty of obedience obliges board members to ensure the organization is operating in a manner that furthers its stated purpose and is always in compliance with all statutes and regulations.
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