Directors or boards are the governing bodies of virtually all non-profits and companies. They set the plans for the company, award the individuals who execute these plans, and oversee the executive staff. Many nonprofits also have advisory boards that provide guidance or advice to the board and executive director.

Commercial and nonprofit boards share some commonalities along the road to success. Healthy boards require careful recruitment, training and orientation of new members. They also require a collaboration between staff and board.

A key role of both kinds of boards is establishing strategic goals and making sure that management’s actions are in line to those goals. Both types of boards need to ensure there are operating plans that ensure that financial resources and allocations are done in a way that achieves the long-term and near-term organizational goals, and that policies promote conformity with ethical and legal standards.

Nonprofit boards are generally bigger than those of for-profit businesses, since they are required to represent all constituencies that have a stake in the institution’s activities. The boards of independent colleges typically comprise 70 or more members, including wealthy parents, wealthy individuals, teachers and alumni.

Typically the for-profit and non-profit boards meet a few times per year to discuss their business and take decisions. They also have their own governing documents which include bylaws, articles of incorporation and descriptions of the responsibilities and responsibility of the board as well as committees, and individual directors. The two types of boards formulate written policies, such as those M&A data room
regarding director independence and conflicts of interests as well as codes of conduct, confidentiality and indemnification.