NORD Nonprofit Resource Center

Board Governance

The governance of a charity is the most important element for earning and maintaining public trust. The National Organization for Rare Disorders believes that governing boards of nonprofit patient organizations should be comprised of people who are well-informed and truly active in overseeing the charity’s operations and finances.

The success of a 501(c)3 nonprofit organization depends on financial support that is received from the general public, and the public wants to be assured that unbiased people with a passion for the agency’s mission will govern the agency. If a board were to tolerate a climate of neglect or secrecy, then the organization’s assets are at risk of being used irresponsibly and not in the best interest of patients and families. Each year, an organization’s tax form and a list of its Board of Directors are made publicly available on the Internet so potential donors and charity monitoring groups can see who is responsible for the corporation.

The Right Shape and Size

Patient organizations with very small or very large governing boards are often problematic. Small boards may not fully represent the public interest and very large boards might be less attentive to their oversight duties. An organization may want to create an executive committee with delegated responsibilities, as well as establish advisory committees. As a general rule-of-thumb, a nonprofit corporation should have no less than five people on its Board of Directors, and more than 25 may hinder the decision-making work of the board.

When a disease is rare, the number of people willing and able to participate on a Board of Directors may be limited. Facing this reality, the people who actually start the organization are often tempted to appoint their friends or relatives to the board, but this can later lead to problems. Members of the board should not be from the same family, although legally there is no prohibition against it. If several members of one family are on the board, they may be suspected of having too much influence over the conduct of the corporation. Individual board members should always be able to vote their conscience on important issues and not feel pressured by family loyalties.

A Good Mix of People

The Board of Directors for a rare disease patient organization with a nation-wide scope should be reflective of a democracy—meaning they are elected, geographically dispersed, come from different areas of society and represent the various constituencies affected by the disease. Successful governing boards include individuals not only knowledgeable and passionate about the organization’s programs, but also those with expertise in critical areas involving finance, legal issues and ethics. Do not include language in the bylaws that limits the composition of the board to only people personally affected by the disease, only parents, only caregivers, etc. NORD suggests looking for candidates with particular skill-sets, for example, accountants, lawyers, writers, marketing professionals—as well as individuals with a direct relationship to the disease.

In addition, an organization’s bylaws should provide a clear avenue for members who want to improve the organization to have a voice and offer ways for them to participate in leadership. A system of committees can provide a structure that may help the Board of Directors learn about issues and find solutions to problems, and will offer members an important way to participate and formulate new policies. The founders of the organization should be sensitive to these needs and base the governance documents upon a vision for future growth.

Nonprofit patient organizations should ensure that all board members understand their roles and responsibilities, and actively promote good governance practices. While adopting a particular model may not be required by all organizations, those that make board governance a high priority are more likely to be successful in pursuing greater public support and achieving their mission.