Your association is a nonprofit association. Your Board may be empowered by your bylaws to make the final decision in all things for your association. Your board may be a Board of Directors, Board of Trustees or an Advisory Board.
1. A Board of Directors usually appoints the officers of your association, enforces the association Bylaws and elects a chairperson who becomes the Chief Executive Officer of the association. Boards generally hire an individual or company to be the Chief Operations Officer of the association and gives this individual the title of Executive Director. Ultimate control of every facet of the organization rests with the Board of Directors.
2. A Board of Trustees does these same things but control of the organization is delegated to the CEO and Officers. In all matters the Trustees represent the interests of the group rather than the individual members. Ultimate control of every facet of the organization rests with each of the elected and appointed Officers. However, the Board of Trustees can replace any officer or elected official at any time.
3. An Advisory Board advises the CEO and the CEO runs the organization. Ultimate control of the organization rests with the CEO.
The most efficient way to run any organization -- and the least democratic -- is to have one person make the executive decisions for the organization. The most democratic -- and the least efficient -- way to run any organization is to require the board to reach consensus on each and every issue.
To review, there are three basic structures for a Board of Directors, Trustees or Advisors:
1. Decision Makers - The board of directors makes the decisions for how the association will function. They make the executive, operating and financial decisions.
2. Advisors - The advisory board members are advisors to the chairperson of the board who is the ultimate decision maker for the corporation.
3. Composite - The board of Trustees has voting and non-voting members. The voting members are the decision makers for the board. The non-voting members are advisors to the board. The chairperson is the chairperson.
You need to decide how your board will operate. You can become the dictator or the consensus-maker or anything in-between. You can spread the power to control the organization over all the members, some of the members or one of the members. As you make that decision consider the following issues:
1. Every corporation is required to have a chairperson. This title may also be chairman or chairwoman. The corporation may have many other directors as it decides. The minimum total number of directors is one. The chairperson is also a director.
2. The Chief Executive Officer (CEO) is usually the chairperson. But any member of the board or officer of the corporation may be the CEO. Whomever that person is, he or she is the ultimate executive decision-maker for the corporation.
3. The Chief Operating Officer (COO) makes the routine day to day operating decisions and enforces the articles of incorporation, bylaws and regulations of the corporation. This person is usually the president or vice-president of the corporation. The COO may or may not be a member of the board of directors.
4. The CEO may also be the COO -- but in this case CEO is the only title used. This is often the case in smaller organizations and start-ups. The chairperson of the board can be the president of the association, CEO and COO. If this is the case, the public announcement is usually "president and CEO" though it's also proper to announce "president and chairperson of the board."
5. The corporation needs a secretary. The secretary for the board may be a director of the corporation or not. The secretary for the board may be an officer and/or employee of the corporation or not. The secretary for the board may be under contract to be the secretary for the board and/or the corporation. The same person cannot legally be both the president and secretary of the corporation.
6. Most small corporations elect or appoint a secretary for the board and that person is usually a member of the board. But this is not required. An independent person, company or corporation may serve as secretary to the board without being a corporate director.
7. The corporation needs a treasurer. Unless the board has sources of income separate from the corporation, the board does not need a treasurer. There is no legal requirement for the corporate treasurer be a member of the board of directors unless your bylaws require otherwise.
8. Most small corporations hire or appoint a person, company or corporation to be the treasurer for the corporation. The treasurer may or may not be a member of the board of directors. Appointed treasurers may volunteer their services. It's usually best to invite volunteer treasurers to also be a director and Chief Financial Officer (CFO). That looks good on their resumes and they will appreciate the gesture; but it is not a requirement.
9. We suggest that most small associations elect a chairperson to preside over board meetings and serve as CEO for the corporation. The CEO can also be the corporate president. Most small start-ups work better if the CEO, Chairperson and President are the same person -- at least in the beginning. In a pinch, the CEO can also be the CFO -- though it's best not to use both the CEO and CFO titles. CEO says it all.
10. We also suggest that the initial board consist of three or more directors -- the chairperson is also a director. An odd number of directors is recommended.
Decide how you want to create your board, and what officers you want to run your association. This information is required for filing your application.
