Legally, boards are required to ensure that an organization is able to fulfill its mission and has a sound IT strategies for enhancing customer experiences strategy and doesn’t get into financial or legal problems. The manner in which boards are required to fulfill these obligations varies greatly and is highly dependent on the situation.
Boards often make the error of becoming too involved with operational issues that should be left up to management or they are unclear about their legal obligations for the decisions and actions taken on behalf of a company. This confusion usually results from not keeping up with the constantly changing requirements for boards, or from unexpected issues such as unexpected financial crisis or staff departures. Most of the time, this can be solved by having a discussion of the issues that directors face and by giving them orientation and simple written materials.
Another mistake that is common is that the board over-delegates its power and chooses not to look into the issues it has delegated (except in the case of the smallest NPOs). In this scenario the board loses the evaluation function and cannot decide whether the operations are contributing to the performance of the company.
The board should also create a system of governance that includes how it will work with the general manger or chief executive officer. This includes determining how the board will meet regularly, how members will be chosen and removed, and the manner in which the decisions will be made. The board should also create information systems that provide information on the past and future performance in order to assist them in making decisions.