Fiduciary Responsibilities

Just as for any corporation, the board of directors of a non-profit has three primary legal duties known as the three D's:  “Duty of care,” “Duty of loyalty,” and “Duty of obedience.”

  1. Duty of Care: Take care of the nonprofit by ensuring prudent use of all assets, including facility, people, and good will;

  2. Duty of Loyalty: Ensure that the nonprofit's activities and transactions are, first and foremost, advancing its mission; Recognize and disclose conflicts of interest; Make decisions that are in the best interest of the nonprofit corporation; not in the best interest of the individual board member (or any other individual or for-profit entity). 

  3. Duty of Obedience: Ensure that the nonprofit obeys applicable laws and regulations; follows its own bylaws; and that the nonprofit adheres to its stated corporate purposes/mission.

 

As Board members, they are the agents and the members are the clients. Each officer's and each Director's actions must be in the best interest of their client, "even to their on detriment." If they act otherwise, they have breached their fiduciary responsibility as a Board member.