Board's Governance Role 

To serve at peak capacity, board members must have a clear understanding of what is expected of them. Yet where does the role of the board end and that of the CEO begin? What laws govern the responsibilities of trustees and directors? The articles in this section were chosen to help begin to answer these questions.  

Good Policies: First Line of Defense for Post-Enron Governance

The problems brought to light by the Enron scandal have impacted governance practices, and regulatory scrutiny of them, in both the for-profit and not-for-profit realms. Health attorney Michael Peregrine describes the ten specific policies he recommends hospital boards adopt in a post-Enron environment in this Great Boards article. Suggestions include crafting a conflict-of-interest policy and ensuring a policy on board compensation exists.

(Barry S. Bader, Great Boards)

The Legal Obligations of Not-For-Profit Boards

This article, by Linda B. Miller of the Volunteer Trustees Foundation, clarifies the key laws that impact not-for-profit boards. Board members must ensure that each decision made concerning the use of assets furthers the organization’s public purpose. Not-for-profit boards also have a legal duty to exercise diligence in making decisions involving charitable assets. Furthermore, trustees and directors are precluded from using their position to enrich either themselves, their families or their businesses at the expense of the not-for-profit entity.

(Linda B. Miller, Volunteer Trustees Foundation) 

Governance as Leadership: An Interview with Richard P. Chait

This Great Boards article highlights the central tenets of a recently-published book on board governance. According to the authors, most boards spend the bulk of their time fulfilling their fiduciary responsibilities and have little time left to engage in “generative” governance in which trustees are engaged in deeper inquiry, exploring root causes and new ideas.

(Great Boards, Summer 2005)