board of trustees vs board of directors
In this article, we will tackle the two common types of leadership: boardsoftrusteesvsboardsofdirectors.One way to tell them apart is that a boardoftrustees governs a nonprofit organization or a trust, while a boardofdirectors typically leads a for-profit business. What Does a BoardofTrustees Do? A charitable trust is a trust that distributes its assets to a charity.
Understanding the Context
The role of the trustees is to oversee a charitable trust. Trustees are held to a higher fiduciary standard than other boarddirectors. Compensation differences: paid directorsvs volunteer trustees. Compensation structures reflect the different nature of these governance roles.
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Key Insights
Boardoftrustees: Trustees typically serve on a volunteer basis, especially in nonprofit organizations and charitable foundations. A boardoftrustees functions similar to a boardofdirectors, but is usually responsible for overseeing a nonprofit, educational institution, or religious organization instead of a business. Both boarddirectors and trustees have particular duties and responsibilities to the organization. However, trustees are regulated by state trust law, which tends to put trustees at a higher standard than boarddirectors. SummaryDefining the BoardofDirectorsUnderstanding TrusteesThe role of a boardofdirectors is central to the governance of an organization.
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nonprofit board member duties responsibilities of a pastor types of charitable trustsFinal Thoughts
boardofdirectors.Each organization decides to set up a boardoftrustees and includes specific requirements and procedures in its bylaws. An organization's bylaws include the number oftrustees, the process for appointment or election, and the duration of terms. A boardoftrustees may consist of three to thirty people.
