Boards have a legal requirement to exercise their due diligence to ensure that the organization is able to fulfill its mission and has a solid strategy and doesn’t get into financial or legal difficulties. The way in which boards take on these responsibilities varies greatly and is highly dependent on the particular circumstances.

Boards often commit the blunders of becoming too involved with operational issues that should be left up to management or are unclear about their legal liability for the decisions strengthening online security with advanced cybersecurity and actions taken on behalf of the company. This confusion often results from not keeping up with ever-changing demands placed on boards, or from unexpected issues such as unexpected staff resignations or financial crises. Usually, this can be remedied by taking time for discussion of the issues faced by directors and by giving them an orientation and simple written material.

Another common error is that the board over-delegates its authority and chooses not to look into the matters it has delegated (except in the smallest of NPOs). In this case, the board loses the evaluation function and cannot assess whether the operations are contributing to a satisfactory performance for the company.

The board should also create the governance structure that outlines how it will work with the general manger or chief executive officer. This includes determining how the board will be scheduled to meet regularly, how members will be selected and removed and how the board will make its decisions. The board must also establish information systems that can provide valid data on past and future performance to help in its decision-making.