Directors and Officers—Do You Know the Difference?

Directors vote, and officers implement. In a nutshell, that is the difference between directors and officers.

State law gives authority over the nonprofit corporation to the board of directors, and the board acts collectively. Individual directors have no power over the corporation. In practical terms, this means that, to conduct its business, the board must come together in a properly convened meeting at which a quorum is present.

“Director” is the title given to the individuals serving on the board of directors. Directors are in a fiduciary relationship with the nonprofit corporation—that is, they owe legal duties to the corporation by virtue of their position as directors possessing voting power.

Individuals come to their board service in different ways, depending on the type of organization. In most nonprofits, the board is self-perpetuating, meaning that the board appoints or elects individuals to serve. In membership organizations, the voting membership elects the directors. Sometimes, directors serve “ex officio,” meaning that the individual serves as director because of another position he or she holds. For example, the Executive Director of the nonprofit may serve as a director ex officio, or a representative of another organization that is seen as an important constituent may be an ex officio director. (In no case does “ex officio” mean “non-voting”—unless the bylaws so state, and to return to the nutshell statement above, anyone who does not vote is not a director.)

Since a board is a collective body, how can it get its work done? If it decides to enter a contract, how can a board sign it? All the hands pile up on the pen? Not very efficient. The problem is solved by the election of officers. The board chooses these individuals to carry out its directives. In our next blog, we’ll discuss the officers your organization needs and the roles they play.

The foregoing is provided for information and educational purposes only and does not constitute legal advice. Consult an attorney or accountant for advice regarding your organization’s specific situation.

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