I sit on several for-profit and nonprofit boards. While a few are non-fiduciary, the majority are. “A fiduciary duty involves actions taken in the best interests of another person or entity. Fiduciary duty describes the relationship between an attorney, a client, a guardian, and a ward. Fiduciary duties include duty of care, loyalty, good faith, confidentiality, prudence, and disclosure.” It also describes the relationship and duty of a board member to the organization on whose board they sit.

What it is not is management. It is not ownership. It occupies that unique space of sitting between the two. A board member understands the goals of the shareholder or, in the case of the non-profit, the mission. This informs strategy and long-term objectives. This is the framework that holds management accountable for performance and behavior. As I often reference when asked, the value of an independent fiduciary director is the ability to ask hard questions and not have to have Sunday family dinners with ownership.

Strong boards and board committees need to practice the following 12 points.

1. Strong understanding of the organization’s mission and products.
2. Strong understanding of the marketplace and competition.
3. Clarity of all the financials, budget, capital stacks, and balance sheets.
4. Strategy reviewed quarterly.
5. Radar is the ability to look forward to threats and opportunities and the appropriate responses.
6. Hold itself accountable for the talent of the CEO and talent overall in the organization.
7. Understand and balance the shareholders’ objectives with management’s strategy and the firm’s capital needs. Understand that in addition to shareholders, there are a total of 7 stakeholders in any business or nonprofit. All need attention to thrive.

• Employees
• Employee’s Families
• Alumni
• Customers
• Suppliers
• Shareholders
• The Community

8. Ensure that the board meetings and committee sessions are the safest place for honest and fact-based discussions.

9.  Be available on demand and need.

10. Do your homework and be honest with your feedback.

11. Listen first

12. Always represent and support the company. Its mission, staff, and shareholders.

A strong board with outside independent directors can significantly impact a company or non-profit performance. My best advice comes from my nonprofit experience at Episcopal Community Services, where I served as Head Coach and Executive Director for 11 years.

“To go fast, go alone, to go far, go together.”

Business is too hard to go alone. You need to use all the tools in your toolbox.

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