What is a Board Manual?

A board manual is a comprehensive document that outlines the guidelines that every board of directors (BOD) must follow to carry out their duties effectively. It contains sections on the roles and responsibilities of the board, as well as the company’s history, policies, and financials. For existing members, a board manual acts as a reference guide. For the new ones, it is an induction tool to orient them to the organization’s governance structure and operations. 

A well-written manual provides a clear roadmap for BOD, both existing and future members, ensuring they understand what is expected of them. This clarity allows them to be more effective and contribute to the organization’s success. 

Board Charter vs. Board Manual

Both are essential governance documents, but they serve entirely different purposes. The board charter is a short written policy document designed for external publication that sets out the objectives and authorities of the BOD at a high level. On the other hand, a board manual is a longer document than the charter — generally 50 to 150 pages — that lays out every possible guideline, policy, and procedure needed to support the board in fulfilling its responsibilities. 

Key Components of a Board Manual

While the specific contents of a board manual may vary depending on the organization’s size and industry, these are commonly what goes in the manual:

• Board Structure and Composition: This usually contains the number of members currently sitting on the board, their profiles, authorities, and terms of service. It also details the different committees (e.g., audit, compensation, nominating) under the board.
• Responsibilities of Board Members: This outlines board member duties that define the organization’s strategic direction. This also includes their involvement in specific committees.
• Legal Duties: This provides guidance on adhering to the fundamental legal duties they need to fulfill, including their duty of care, loyalty, and obedience. 
• Board Meetings and Procedures: Meetings are crucial to the board. This section specifies procedures for scheduling meetings, preparing agendas, quorum, voting, and participation, typically following Robert’s Rules of Order handbook for meeting protocols.
• Code of Conduct and Ethics: This covers the expected behavior, confidentiality, and professional conduct of the BOD to ensure integrity and fitness for the role.
• Board Policies and Procedures: This includes policies for selecting new members, evaluating performance, handling conflicts of interest, and removing members if need be. 

Board manuals also comprise other elements that help newer members understand the organization’s context and priorities, such as:

• Business History: This describes the organization’s history of industry operations.
• Business Strategy: This outlines the company’s long-term goals and strategic plans.
• Company Values: This consists of the organization’s mission, vision, and values.
• Official Documents: These are the company’s legal documents, including bylaws and articles of incorporation.
• Financial Information: This includes the budget, cash flow, and how funds are allocated and spent. It also summarizes the organization’s financial health, including annual and audit reports from the previous years.

Tips When Creating a Board Manual

To develop an effective manual that is practical and reliable, consider the following:

• Keep content concise to avoid overwhelming new members.  
• Encourage the board to read, comprehend, and ask questions about the manual.  
• Ask for feedback on the manual’s usefulness regularly, preferably once or twice a year. 
• Update the manual based on their suggestions.