Running Head: BOARD CAPACITY 1

Board Capacity

Name

Affiliation
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Board Capacity

Why is mission focus so essential to an organization?

Mission statements have little or no value to most of the companies today. However, a

mission statement is one of the critical elements, which every company should have to achieve

its objectives. A clearly written mission statement determines the direction of the company.

Mission statements remind the employee and management teams the reasons for the existence of

the company. Additionally, it puts emphasis on the company`s future. The mission explains to us

what is done currently by the company that will lead it to where it wants to be. The company`s

board setting a clear mission provides a framework for thinking during the decision making

process. It guides the board to stay on the path even when dealing with complicated financial

issues, (Renz & Smith, 2010).

List specific examples of a board not meeting the duties of care, loyalty, and obedience.

Although the board does not participate in the daily activities of the organization, they are

responsible for making vital decision and managing the organization. Examples of activities

performed by the board of directors without meeting care, loyalty, and obedience include;

 Firing of executive directors and employees.

 Authorizing important financial transactions

 Framing of strategic plans.

 Identifying and managing risks.

 Managing potential conflicts of interest

 Abiding by the organization’s rules and regulations

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 Avoiding engagement in un authorized projects.

Why do non-profits generally see board service as a volunteer commitment?

Many non-profit organizations have vacancies on their board of directors. These

companies see board of director as volunteers because they work specifically to benefit charity

organizations. They also offer personal and professional benefits to the individuals that are

interested in serving the public, (Renz & Smith, 2010).

Should every board have directors’ and officers insurance?

Although directors and insurance officers are always associated with large companies

which excise large profits, they are necessary for every company to acquire them. A particular

individual may have little exposure and familiarity about the affairs and various activities

concerning the organization, (Renz & Smith, 2010).

Discuss differences between private inurement and private benefit.

Private inurement refers to the significant influence an individual has towards an

organization. Moreover, an individual enters an organization with nonprofit arrangement and

gets more than he or she provides in return to the company. Whereas private benefit refers to

significance of an individual benefiting from the organization whether he or she is associated

with the organization or not. Nonprofit organization have to differentiate the two terms since

they are all unacceptable practices and violating them may result in to loss of the nonprofit status

of the organization, (Renz & Smith, 2010).

The question of this week`s discussion is, How can troublesome members of the board be dealt

with?
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Reference

Renz, D.O & Smith, K.(2010 ). The Handbook of Nonprofit Governance. Board Source,

Building Effective Nonprofit Boards.