Background

What is a board?

The responsibility of an organization’s board is to:

– Provide leadership and direction to the organization; and
– Govern the affairs of the organization on behalf of its stakeholders or members

Some organizations are governed by administrative or ‘hands-on’ boards while others are led by policy-governing boards. Both boards may be called a board of directors, a board of governors or a board of trustees.

What is a director?

A director is an individual who is a member of a governing board of an organization. Regardless of the name, size, or type of organization, the role of the director remains fairly constant. Directors and officers of non-profit organizations are responsible for governing the affairs of the organization on behalf of its members. Directors and officers have a relationship of ‘trust’ with the members of the organization, and it is from this trust relationship that certain important legal duties arise.

Directors of non-profit organizations are volunteers and are rarely paid for their services. As a rule, directors are elected or appointed to their positions on the board. They may also be officers, where an officer fulfills certain corporate roles and functions (such as those duties of a ‘president, ’‘treasurer’ or ‘secretary’ of the organization). Officers can also be senior staff persons, and in rare circumstances, staff persons can also be directors.

What are the legal duties of a director?

The basic responsibility of directors is to represent the interest of the members in directing the affairs of the organization, and to do so within the confines of the law. This legal duty is described in statutes and has been expanded and interpreted in the common law. In representing the members of the organization and acting as their ‘trustee,’ directors have three basic duties: Diligence, Loyalty, and Obedience.

A director who fails to fulfill his or her duties as outlined above may be liable. The term ‘liability’ refers to the responsibility of directors and organizations for the consequences of conduct that fails to meet a pre-determined legal standard.

For more information, click here to order a free CD of resources developed by The Charities File.

Tools and Resources

Basic information sheet (PDF)

Key information on the roles and responsibilities of the Board of Directors

Self-guided training: (PDF)

Board training for maintaining charitable status

Annual calendar checklist for registered charities: (PDF)

Activities to include on a charity’s annual calendar to meet obligations and maintain charitable status

Description of charitable purpose and activities (PDF)

Common law information on whether an organization qualifies as a charity

Summary of the legal duties of the Board of Directors (PDF)