Commercial and nonprofit boards or directors are the legal governing bodies of various business entities. These businesses may be traded on a publicly traded stock market (a public company), privately owned and not subject to taxation (a private or family limited liability company or partnership) or exempt from federal income tax because of its charitable purpose or mission (a non-profit corporation).

Boards are expected to meet the duties of a fiduciary, regardless of the type of organization they represent. This means that they must ensure that their decisions are based upon actual facts as well as the best interests of an organization. Boards also should be mindful of the legal implications of their actions and make sure that they meet all the rules stipulated in their bylaws. These include those related to fundraising and conflicts of interests, as well as other policies.

Keep in mind that the majority are volunteers and not paid. Therefore, board members must be active and involved in the work that the board does for the community.

One way to keep a non-profit board engaged is to provide them with a non-legally binding agreement that clearly outlines the main duties, responsibilities, and expectations. This will reduce the amount of back and forth meetings necessary for reporting.

Diversity is another method to improve a board. A mix of people with different backgrounds and perspectives can help to prevent groupthink and myopia. This is why it is vital to choose diverse candidates from diverse sources, including people who are directly affected by the social problem that your nonprofit addresses. Other considerations to take into account are ethnicity, age, occupations and work styles along with political ideology and geographic geographical location.