What are the common types of boards and board roles?

In any organization, whether it’s a for-profit company or a commercial organization, having a board of directors play a significant role in effective governance and decision-making. Several common types of boards exist, each with its specific purpose and responsibilities. Within these boards, there are some specific board roles that are vital to ensuring that the group work effectively and ethically to meet its responsibilities.

Understanding the different types of boards and board roles is crucial for individuals considering joining a board and determining what board role is right for them.

Common Types of Boards

There are numerous types of boards that organizations engage in, and this will be determined by the organization’s size, type, structure, industry, purpose, statutory requirements, and regulatory requirements. Some organizations will have more than one type of board. These board types each serve a specific purpose and play different roles in shaping the organization’s strategic direction and ensuring its long-term success.

Let’s look at the most common ones that you will come across during your search for a board appointment.

Executive or Operating Boards

Most organizations will have an Executive or Operating Board, which is why it is one of the most common types of board. Executive Boards are typically made up of senior executives or department heads who are employees of the organization. Usually, the executive board will not include or operate in place of the Chief Executive Officer (CEO).

Executive Boards are responsible for running the day-to-day running of an organization, effectively managing essential yet strategic aspects of the organization’s operations. This allows the Board of Directors to focus on higher-level decision-making and long-term planning while entrusting the operational responsibilities to the Executive Board.

If you are looking for a board career, you should acknowledge these board members are employees, not independent or external board members. Serving on these boards does provide credible board experience. This is something to consider when developing your executive career and a board career. Should you start focussing on, or aspiring to, executive roles that include a seat on an Executive Board?

Corporate Boards of Directors

Corporate Boards of Directors play a critical role in the governance and strategic decision-making of a corporation. The primary duty of corporate boards is to act in the best interests of the company and its shareholders. They are responsible for setting the overall direction and vision of the organization, as well as overseeing the executive management team and ensuring compliance with legal and ethical standards.

The roles and responsibilities of corporate boards can vary depending on the size and nature of the organization. However, common roles include appointing and evaluating the CEO and other executive officers, approving major financial decisions and budgets, reviewing and approving corporate policies and strategies, assessing performance and risk management, and representing the interests of shareholders.

Legal requirements for having a board of directors in a corporation may include having a minimum number of directors, holding regular board meetings, and maintaining accurate and up-to-date corporate records. In privately held companies, directors are often appointed by owners or investors.

Publicly listed companies in the U.S. are legally required to have a Board of Directors. Members of the board of directors are elected by shareholders at the annual meeting. The board’s nomination committee are usually responsible for nominating board candidates.

Nonprofit Boards of Directors

Nonprofit organizations rely on boards of directors to provide strategic oversight, governance, and guidance. These boards play a vital role in ensuring the success and sustainability of the organization. They oversee the organization’s operations, policies, financial management and fundraising. The governing board also ensures legal and ethical compliance and hires and evaluates the executive director.

Nonprofit boards still have a duty of care, meaning they must act in the best interests of the organization and its beneficiaries. This includes ensuring the nonprofit adheres to its mission, making informed decisions, and managing resources responsibly.

Nonprofit organizations likely to have a Board of Directors include educational institutions, healthcare organizations, arts and cultural organizations, and social service agencies. These boards usually seek individuals with diverse backgrounds and expertise who are passionate about furthering the organization’s mission.

Advisory Boards

Many organizations, both for-profit and nonprofit, establish advisory boards to gain expertise and guidance in specific areas. Advisory board members are appointed because they are experts in their fields and can provide valuable input and external perspectives.

Advisory Boards usually have a specific focus and are often required due to knowledge gaps within the board of directors, including in finance, law, risk, marketing, cybersecurity, information technology and human resources. The guidance and recommendations from advisory boards help shape the organization’s strategy, enabling it to navigate challenges and seize opportunities in a rapidly evolving landscape.

Advisory boards work closely with the board of directors and senior management. Serving on one will not only ratify you as an expert in your field but also provide valuable board and board-level experience.

Government Boards

Government boards can be found at all levels of government and play a crucial in the governance and policy-making of various government entities, departments and bodies. At the highest level, Government Boards may also be referred to as a Board of Commissioners. These boards play a crucial role in ensuring the efficient and effective functioning of government agencies and set policies that guide the activities and decisions of the agency.

Government Boards are established to oversee various facets of public administration. A Government Board’s objectives vary widely depending on the government entity where it operates and the responsibilities appointed. These boards focus on areas of public services and administration such as education, healthcare, transportation, or finance. They ensure effective governance, policy formulation, financial management, legal and regulatory compliance, and the efficient delivery of public services. 

Board of Trustees

The Board of Trustees is a governing board that plays a crucial role in overseeing the management of a trust, foundation, or charitable organization. Often, the board of trustees will be responsible for holding “in-trust” the funds, assets, or property that belong to others with a fiduciary duty to protect them. The board will often have a mix of internal and external trustees.

The Board of Trustees is responsible for ensuring the organization operates within legal and ethical boundaries whilst ensuring the organization’s long-term sustainability, effectiveness, and impact, plus for hiring and overseeing the performance of the executive director or CEO. They provide guidance and support to the executive director, ensuring they have the resources necessary to carry out their duties effectively.

Policy Boards

A Policy Board is a type of board that is distinct from traditional boards in that its primary focus is on forming organizational policies and directions. A Policy Board is responsible for setting the broad policies, framework and goals that guide the organization’s activities and operations. It is the CEO or senior staff member who implements these policies, with the guidance and oversight of the Policy Board.

Fundraising Boards

Fundraising boards play a critical role in nonprofit organizations by dedicating their efforts to securing funding. These boards are responsible for developing strategies and initiatives to raise money and revenue streams through various sources such as grants, private giving activities and partnerships. Fundraising Boards also guide the use of resources and ensure that the organization complies with any funding requirements. 

Academic Boards

Academic boards are governance bodies that play a vital role in overseeing the academic operations of educational institutions, such as colleges and universities. These boards are responsible for maintaining the academic integrity and standards of the institution while ensuring the overall success of its academic programs.

The main types of academic boards include:

1. Governing Board: is responsible for establishing the overall strategic direction of the institution. It focuses on long-term planning, setting policies, and ensuring compliance with legal and regulatory requirements. The governing board may include internal or external members and stakeholders, depending on the charter.

2. Academic Senate: is composed of faculty members representing different academic disciplines within the institution. Their primary role is to make academic decisions, including curriculum development, program modifications, and academic policy changes. 

3. Faculty Board: The faculty board represents the interests of the staff within an educational institution. 

4. Student Union: represents the voice of the student body and often collaborates with academic boards on matters that affect students’ academic experience. They may have seats or representatives on Academic Boards.

What are the common titles or official board member’s roles?

When it comes to the structure, title and roles of boards, they too will differ depending on the board type, responsibilities, scope, charter and organization they operate within. There are, however, several key or common titles that you will come across when looking for a board seat.

These typically include:

1. Board Chair: also known as the chairperson, is the board’s leader. They are responsible for overseeing board meetings, ensuring the board operates effectively, and ensuring the board’s objectives and strategic goals are met.

2. Vice Board Chair: supports the board chair in their duties and may act as the chair in their absence. They provide leadership in various aspects of board governance and may take on specific responsibilities as designated by the organization.

3. Board Secretary: is responsible for documenting and maintaining accurate records of board meetings. They ensure meeting minutes are recorded, official documents are properly stored, and board activities comply with legal requirements. They also ensure board members receive all necessary materials before meetings.

4. Company Secretary: is different from a Board Secretary. While both roles involve administrative and communication tasks, the Company Secretary acts as the formal communication pathway between the organization, its directors, and stakeholders. They handle the circulation and publication of relevant company information and ensure that all appropriate parties are informed of critical developments and decisions. They also ensure the board is kept abreast of changes in legislation and regulations that impact the organization

5. Board Treasurer: oversees and safeguards the organization’s financial resources. They monitor the organization’s financial health, review financial statements, and present financial reports to the board. Additionally, they collaborate with the finance committee or senior executives.

6. Executive Board Directors: are also known as inside board directors. They are board members who also hold an executive role within the organization. With firsthand knowledge of the company’s operations, they are intricately involved in its day-to-day activities.

7. Non-Executive Board Directors: are also known as outside or independent board directors. They are board members separate from the organization’s management, nor do they have an affiliation with the organization. They bring an external perspective to the board of directors, providing independent oversight and accountability for the company’s actions.

8. Advisory Board Members: based on their specialist knowledge and experience, have been selected to sit on a particular Advisory Board. They can be internal or external to the organization. They provide valuable advice and guidance without having formal decision-making authority.

Conclusion

There are many different types of boards that an organization may choose or be required to adopt. Each type of board is designed to provide governance or value-add to the organization. Each board will assign different board roles or titles, commonly the Board Chair, Board Vice Chair, Board Secretary, Treasurer, Non-Executive Directors, and Advisory Board Members. Depending on the organization’s strategic objectives and needs, the right mix of board members must be recruited. For those of you considering a board career, understanding the common types of boards and board roles available will help determine what boards and board roles are right for you.

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