What is a Board of Trustees?

A Board of Trustees is a governing body that oversees the governance and management of an organization, often in a nonprofit or charitable context, though it can also exist in educational institutions, foundations, and other types of organizations. They focus on ensuring that the organization fulfills its mission, is financially sustainable, and operates in a legally and ethically responsible manner.

The Board of Trustees make key decisions on strategy, finances, and major policies, and are accountable to the organization’s stakeholders. Unlike a Board of Directors, which typically governs for-profit companies, a Board of Trustees focuses on stewardship and long-term sustainability.

Key Functions of a Board of Trustees:

1. Mission and Vision Oversight: The board ensures the organization stays true to its mission and vision by shaping its long-term direction and aligning activities with its core objectives.
2. Financial Stewardship: Oversees financial health, approves budgets, reviews reports, and ensures effective resource management.
3. Strategic Direction: Sets the organization’s strategic goals and approves major decisions, guiding the organization’s mission and objectives.
4. Legal and Ethical Oversight: Ensures compliance with legal requirements and ethical standards, maintaining proper governance practices and accountability in operations. 
5. Selection and Evaluation of Leadership: Plays a role in hiring, evaluating, and supporting the executive director/CEO, and may be responsible for developing succession plans.
6. Fundraising and Resource Development: Actively involved in fundraising, leveraging their networks, expertise, and influence to attract donors and funding to support the organization’s activities.
7. Stakeholder Accountability: Represents stakeholder interests (such as donors, community members, or beneficiaries), ensuring transparency and maintaining the organization’s credibility.

How is a Board of Trustees structured?

A Board of Trustees is typically structured to ensure effective governance and oversight of the organization. The structure can vary depending on the type and size of the organization, but there are some common elements:

1. Board Chairperson/President – The Chairperson (sometimes called the President) leads the Board, sets the agenda for meetings, and ensures that the Board functions effectively. They often act as the primary liaison between the Board and the Executive Director or CEO.
2. Board Members – Board members, also called trustees, are responsible for making high-level decisions and overseeing the organization’s activities. 
3. Vice Chair/Vice President – Assists the Chairperson and may step in to lead meetings or perform duties in their absence. This role often serves as a support to the Chairperson and may oversee specific initiatives or projects.
4. Secretary – Responsible for maintaining official records, including meeting minutes, governance documents, and organizational bylaws. They may also handle correspondence and ensure legal compliance with document retention.
5. Treasurer – Oversees the financial health of the organization, ensuring accurate financial records, reviewing budgets, and reporting on the financial status at Board meetings. This role often includes chairing a finance or audit committee.
6. Committees – Many Boards form committees to focus on specific areas of governance. Common committees include:
   • Finance Committee: Responsible for financial oversight.
   • Audit Committee: Ensures compliance with financial regulations and oversees audits.
   • Nominating Committee: Handles Board member recruitment and succession planning.
   • Fundraising or Development Committee: Focuses on raising funds and building donor relationships.
7. Advisory Roles – Some Boards have advisory members or non-voting members who provide guidance and expertise but don’t have decision-making authority. These individuals contribute valuable insights without holding the same responsibilities as full trustees.
8. Executive Director/CEO (Non-voting) – While not technically a Board member, the Executive Director or CEO typically attends Board meetings and reports on the organization’s operations, helping to bridge the gap between management and governance. They are responsible for day-to-day operations but are held accountable by the Board.

Board of Trustees vs.  Board of Directors

The terms Board of Trustees and Board of Directors are sometimes used interchangeably, especially in nonprofit organizations, but there are subtle differences in usage. Board of Trustees is commonly associated with nonprofits, foundations, charitable organizations, and educational institutions, where the primary responsibility is to ensure the organization adheres to its mission and is sustainable in the long term. They oversee financial health, provide strategic direction and support leadership.

While a Board of Directors is often used in for-profit corporations, where the board’s main focus is maximizing shareholder value and ensuring corporate governance.

In both cases, however, the board is responsible for governance, oversight, and ensuring that the organization is managed responsibly and in alignment with its values.