Most nonprofit directors and leaders understand the principle of fiduciary responsibility, the principle that they have the same obligation to care for the assets of the organization as they would their own personal assets.
“The contemporary general standard is that a member of the board of a nonprofit organization is required to perform his or her duties in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the director reasonably believes to be in the best interest of the mission, goals, and purpose of the organization.” (650 Essential Nonprofit Law Questions Answered,by Bruce Hopkins)
Bruce Hopkins lists three duties that are “the legal standards against which all actions taken by directors are tested.” They are also standards that can be used to measure the actions of any leader at any level within an organization. They are as follows:
The Duty of Care
The duty of care requires the director to be informed, pay attention, and participate in the work. You will never be an effective leader if you are disconnected from the real work of the organization. Because they care, great leaders know what their people do and why they do it.
The Duty of Loyalty
The duty of loyalty requires the director to exercise his or her power in the best interests of the organization and not in his or her own interests. When you become a leader you become a servant of the organization and your team. It is no longer all about you and what you can get for yourself, but rather it is about what you can do for the good of your people and the people they serve.
The Duty of Obedience
The duty of obedience requires the director to live by the rules imposed on the organization, to comply with any applicable laws, to adhere to the policies of the organization, and to act as a guardian of the mission of the organization. As a leader, you need to know, understand, and abide by the rules. You cannot impose one set of rules on others and live by another set of rules yourself.