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Liability and Fiduciary Responsibility for Board Members?

I think I am on track with who I am asking to be on the board of my fledgling arts organization. I asked someone to join the board that I respect and thought would be an asset. She asked me "What is the liability and fiduciary responsibility of board members?" It is a little embarrassing to ask, but isn't the point of incorporating to limit the liability and potential financial responsibility to staff and directors? We are a non-stock non-profit company but have not yet applied for 501c3 status. I do have books to read up on this so feel free to leave me to the wolves. I will only use your advice to seek out more info and will not consider it legal advice so no need for disclaimers.


on July 26, 2012 6:27am
Hi Jack:
The following is a list of resources that can help you quickly; I recommend first going to the Board Source and Nolo websites and typing in the keywords of questions you have in the search lines, or browsing through their information categories.  Sounds like you have a live one who actually knows something about serving on a nonprofit board--this is a good thing. On the other hand, if she has been burned before, she may be quite shy of doing it again... 
Yes, incorporating limits but does not completely eliminate board member liability.  (See the second link below.)  ALL board members have fiduciary responsibilities.  Nothing ever eliminates that.
A couple of tips from this old nonprofit campaigner:
1.  Beware of recruiting anyone to your board who will just be a chair warmer.  Recruit folks with the specific skills & experience you need, and keep them BUSY, BUSY, BUSY in between board meetings.
2.  It is critically important that each board member understands that they must play some role in fundraising for the organization, and make sure that you have at least a few board members who are comfortable with and reasonably skilled at "The Ask"--the face-to-face asking-for-financial-support activity that will make (if they do it well) or break (if they don't do it at all) your organization.  Use this rule for your board members:  "Give, Get, or Get Off" -- which means "Give $$, Get $$, or Get Off the Board." 
Great website:
Another great website:
Fundraising responsibilities of boards:
A book on boards for small nonprofits:
A book on board responsibilities & board orientation:
"Michael Batts has come to the rescue! In just 85 quick-reading pages, the author delivers a short-enough book that most new board members will read. "Board Member Orientation: The Concise and Complete Guide to Nonprofit Board Service" is a must-have tool for your orientation sessions with new board members. There are 10 chapters:
1. The Legal Authority and Responsibility of Board Members
2. The Proper Role of the Board
3. Board Committees
4. The Board's Role in Risk Management
5. The Board's Role in Financial Matters
6. Governing and Policy Documents
7. The Liability of Board Members
8. Understanding, Evaluating and Protecting Mission
9. Board Meeting Dynamics
10. Completing the Orientation Process by Providing Organization-Specific Information to Board Members"  

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