Starting a nonprofit corporation in Washington DC can be a rewarding experience, but it also requires quite a bit of thought, organization, and hard work. One of your first steps will be to appoint a board of directors to help guide the organization. You might be asking yourself, What does a board of directors do, and what requirements do they need to follow? Here we’ll examine what a board of directors does, and some of the basic requirements expected of a DC nonprofit’s board.
What Is a Board of Directors?
Your board of directors will be responsible for the overall governance of the nonprofit. They kind of act like the captain of a ship, steering the organization in the direction the board thinks it needs to go. The board’s responsibilities include but are not limited to the following:
- Establish and maintain the policies that govern the organization.
- Select and monitor the performance of the nonprofit’s president, CEO, and other high ranking managers.
- Manage the organization’s annual budget and authorize additional budget outlays throughout the year.
- Oversee the management and investment of any investments or endowments.
- Solicit funds to support the mission of the nonprofit.
- Create an accountability system to ensure that the organization complies with all applicable laws and regulations.
What Are the Requirements of a Washington DC Nonprofit Board of Directors?
As outlined in the Code of the District of Columbia, any person elected to the board of your Washington DC Nonprofit will need to meet certain requirements. The cool thing about board of director requirements is that they generally act as guidelines put forth by the state, and aren’t set in stone. In most cases you can set your own board requirements by including them when you file your articles of incorporation or when you create your nonprofit bylaws. That’s why bylaws are so important, because if you don’t create them for your nonprofit, your board will be governed by DC’s default laws, and there won’t be any wiggle room for the board to operate the way you want it to. However, even with your own bylaws, DC has certain legal requirements your nonprofit must follow. Below we go over some important questions as to what will be expected of the board, and how it will generally operate.
How many directors are required?
DC statutes require a nonprofit board of directors to have at least three directors. You can also have more directors. Unless otherwise stated in your Washington DC Nonprofit Bylaws, there is no limit to the number of directors a DC nonprofit can have.
What qualifies someone to sit on the board of directors?
A director of a DC nonprofit corporation must be an individual person, not another entity like an LLC or corporation. Board members don’t have to live in DC to be on the board, unless of course the nonprofit’s bylaws or articles add residency as a requirement.
How long can a director serve on the board?
DC’s requirements are that an elected director can serve no more than one year. The term of a director who is appointed by someone that is not a member of the board, or who is designated in a manner other than by election or appointment can’t exceed 5 years. Terms can be changed in your bylaws.
What are the roles and responsibilities of directors?
A nonprofit’s board of directors manage the activities and the general affairs of the business. More importantly, as established by the Code of the District of Columbia § 29–406.30, the board of directors must act in good faith and in a way that each director believes to be in the best interests of the nonprofit. In essence, you have to elect board members who take their role seriously, and plan to guide the nonprofit in the best way they can.
What are the meeting and voting requirements for directors?
The board of directors will be expected to hold regular meetings. The number and frequency of meetings can be outlined in the bylaws. These meetings can be held in any location, inside DC, or out. Unless the nonprofit’s articles of incorporation or bylaws state otherwise, directors can attend in person or use any means of communication in which all other directors can hear them. This means you can meet via speaker phone in a conference room, via Zoom or Skype, or even through video chat on a phone. A quorum of directors is the number that must be present in order to take a vote. If a vote is taken, a simple majority of the quorum can carry the issue at hand.
How are directors appointed or removed?
Again, the rules for adding or removing a person from your nonprofit’s board of directors should be outlined in your nonprofit bylaws, but in general, and in accordance with DC’s requirements, directors come in the same way they go out, with a vote. DC statutes also allow for a director to be removed for any reason, up to and including not showing up to meetings, committing a crime, or even being declared unable to hold the position on the board. However, there is a small wrinkle when removing a director. Again, unless the bylaws say something different, DC requires that the same directors who voted to add the person to the board, also have to be present for the vote to remove them. Board members may also resign, and the board can take a vote on whether or not to replace them.
How is a vacancy filled if a director leaves?
When a vacancy arises, the remaining board members may find a suitable board member to fill the vacant role. The board members can call a special meeting and take a majority vote. However, these rules can change based on what the nonprofit’s bylaws say. As long as the board has three directors, vacancies don’t necessarily have to be filled.
How are directors compensated?
The board of directors may choose their own compensation. However, due to the nature of this being a nonprofit corporation, in many cases, board members often take little to no salary or other compensation.