Board of Directors
This month, the Church Law Group is focusing on church governance. For example, in this month's "Ask Dave," we discuss the differences between the articles of incorporation, constitution, and bylaws of a church.
Traditionally, the law as to governance of a nonprofit organization has been largely confined to state rules. Recently, this has begun to change. Over the past several years, the IRS has begun to take an active interest in the topic of nonprofit governance. To date, the IRS has concentrated on the composition and independence of the boards of directors of nonprofit organizations, as well as on the compensation of the board members and conflicts of interest.
The essence of the emerging corporate governance principles is that a nonprofit organization must be managed by its board of directors. It is becoming unacceptable for a board of directors to meet infrequently and merely be recipients of reports from the organization’s officers and staff. Rather, the developing law is requiring the board of the organization to become directly involved, to be knowledgeable about the organization’s programs and finances, to understand the climate in which the entity operates, to avoid conflicts of interest, to place the objectives of the organization above personal desires, and to actually govern the nonprofit.
Does your church have a board of directors? Is the board a strong influence in the church or is it just a group of people that sometimes meet once a year?