Obedience sometimes has a bad connotation in our culture. But, when applied to a board member's duties, it may not mean what you think.
Legal and Ethical
According to BoardSource, the Duty of Obedience is the "legal responsibility of ensuring that the organization complies with the applicable federal, state, and local laws and adheres to its mission." Board members are entrusted with upholding the nonprofit's purpose, safeguarding its integrity, and working towards achieving its charitable goals.
Mission Alignment and Impact
The Duty of Obedience ensures that nonprofit boards remain laser-focused on the organization's mission. This means they make strategic decisions that align with the mission, supporting programs and initiatives that fulfill the organization's purpose. Programs that do not support the mission need further examination for mission creep, the expansion beyond the initially set goals. Mission creep creates confusion, upsets donors, and dilutes the organization's efficacy.
Adding programs is tempting, especially when those programs are new and shiny. A program can be a fantastic addition to the community, but if it does not align with the organization's mission, it can destabilize the nonprofit. Board members exercise their Duty of Obedience when actively examining current and new programs for mission alignment. Any program or activity not fulfilling the mission must be modified or stopped. This is not an easy task, especially for those programs that are loved.
Legal Compliance and Accountability
Nonprofit boards are responsible for ensuring compliance with all legal and regulatory requirements. An organization's status as a nonprofit can be removed if it does not follow applicable law. This includes collecting and accounting for charitable donations, filing an IRS return on time, and keeping the state registration current and in good standing.
Board members fulfill their Duty of Obedience by actively monitoring the organization's activities, finances, and governance processes to ensure compliance with applicable laws, tax regulations, and reporting obligations. This has the additional benefit of promoting transparency and accountability, and it protects the organization's reputation.
Financial Management
The Duty of Obedience extends to overseeing the organization's financial management. The board ensures that financial resources are allocated effectively and ethically, maximizing their impact on the community. Boards ensure that the resources of the organization further its mission.
Safeguards are put in place to maintain the integrity of the organization's resources. This includes establishing financial controls, reviewing budgets, and ensuring transparency in financial reporting to maintain the trust of donors and stakeholders.
Why Follow the Duty of Obedience?
Upholding the duty of obedience fosters trust and confidence among stakeholders like donors, volunteers, staff, and the community. Nonprofits rely on the support and engagement of these stakeholders, and their trust is vital for the organization's sustainability. When board members align with the organization's mission and stay legally compliant and financially responsible, they inspire confidence in the nonprofit's leadership and enhance its credibility.