As noted in a previous blog post, Massachusetts law requires a nonprofit corporation to have a president, treasurer, and secretary. One person may wear all the “hats,” but that’s not recommended. Nor should the president and secretary be the same person, since the secretary may occasionally have to certify the president’s signature.
Remember, the officers are the agents of the corporation and should carry out the work of the board. The work is traditionally divided among the three, with general operations going to the president, financial matters to the treasurer, and record-keeping to the secretary. Let’s flesh out their roles a bit further.
At the most basic level, the president’s job is to preside at meetings of the board of directors. In terms of authority, the president is generally authorized by the bylaws to manage day-to-day operations of the nonprofit corporation and to sign documents, such as checks or contracts, that arise in the usual course of the nonprofit’s business. This is especially true when the nonprofit is an all-volunteer organization; in this case, the president may also carry the designation of “chief executive officer” or “CEO.”
When the nonprofit moves to the next level and requires the commitment of paid staff, authority to carry out day-to-day operations is delegated to the executive director, who is then typically designated the chief executive officer. The board will usually authorize the executive director to carry out day-to-day signing duties as well, but it should specify parameters for which matters must come before the board before the executive can be authorized to sign.
Bylaws typically authorize the treasurer to manage the finances of the corporation, but the treasurer’s role may be more broadly or tightly defined. In the all-volunteer nonprofit, the books of accounting are usually in the treasurer’s care, while in the staffed nonprofit, the books may be in the care of another person (variously titled), and the treasurer’s role becomes one primarily of oversight.
The secretary is authorized to maintain the records of the corporation, especially the minutes of the board’s meetings. In Massachusetts, because he or she is the officer who may receive service of process (that is, notice of a lawsuit), the secretary should be a resident of Massachusetts; but if the secretary does not reside in Massachusetts, a “resident agent” must be appointed. As the custodian of the board’s records, the secretary is also the officer tasked with issuing certificates of board action; for example, in connection with a grant, the board may take an action authorizing the executive director to sign the grant agreement, and the secretary would issue a secretary’s certificate to that effect.
Other typical officer positions include one or more vice-presidents who are authorized in the bylaws to act in place of the president if the president is for some reason unable to do so. Assistant treasurers and assistant secretaries may also be authorized, especially in the case of a large board. Some nonprofits use these assistant roles as training grounds for the first-line officers, and the bylaws may state this. At a minimum, the bylaws should state clearly that such officer positions are authorized, and outline their roles and authority to act.
In our next post, we’ll look at the role of voting members.
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.