How to Develop a Board of Directors for a Nonprofit in Louisiana

A board of directors is a requirement for the operation of a Louisiana nonprofit entity. This elected group serves as the governance of your organization in everything from finances to the nonprofit’s mission.

Electing the right personalities to your board of directors is essential for your organization’s success. This guide will help you select your first board or grow an established board to better serve your nonprofit.

Check out our other guides for a look at how to form a nonprofit organization or how to select a board of directors in other states.

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Louisiana Board of Directors Requirements

The Louisiana Nonprofit Corporation Law, Section 201, defines nonprofit directors – and by extension the board of directors – as such:

(9) “Directors” means persons designated in the articles as such, and persons designated, elected or appointed by any other name or title to act as directors, and their successors. The term, when used in relation to any power or duty requiring collective action, means “board of directors”.

The number of required directors on the board is laid out in Section 224:

B. …The number of directors shall be fixed by or in the manner provided in the articles of incorporation or if not so fixed shall be the number fixed by, or in the manner provided in the bylaws. If not so fixed by or in the manner provided in the articles or the bylaws, the number of directors shall be the number of directors elected from time to time by the members. No amendment to the articles or the bylaws reducing the number of directors shall have the effect of shortening the term of any incumbent director.

Putting It Into Practice

A Louisiana nonprofit’s board of directors works as a support system for the organization. Its duties include financial management, structural guidance, the hiring of executive directors, and much more. While the board typically isn’t involved in day-to-day operations, it plays an active role in maintaining the well-being of the organization as a whole, its effectiveness, and its financial health.

A 501(c)(3) eligible nonprofit board of directors in Louisiana MUST:

  • Have a minimum of three board members
  • Elect the following members: president and secretary

Recommended: Read our full guide on How to Start a Nonprofit in Louisiana.

What Is the Function of the Board of Directors?

The Nonprofit Corporation Law, Section 224 establishes the role of the board of directors in the following manner:

B. Subject to any limitations, restrictions, or reservations in the articles, the bylaws, or this Chapter, the affairs of the corporation shall be managed by a board of directors of not less than three natural persons, except that if there are fewer than three members, there need be only as many directors as there are members.

Putting It Into Practice

Before forming your Louisiana nonprofit’s board of directors, it’s important to understand the role this group plays in the success of your organization. The general responsibilities of a board include:

  1. Enforcing the Organization’s Mission and Purpose: The foundation of any nonprofit is its mission so a board’s chief task involves upholding that mission as well as the organization’s purpose.
  2. Hiring a CEO/Executive Director: While your board of directors plays an instrumental role in the success and effectiveness of your nonprofit, it doesn’t participate in the daily operations. That makes it vital for the board to hire a CEO or executive director who will provide effective, day-to-day leadership.
  3. Incorporating New Members: A board also must source and incorporate new board members capable of effectively upholding the organization’s values.
  4. Assessing the Allocation of Funds: Careful distribution of assets within an organization ensures all areas receive adequate funding and thus supports the success of each aspect of a nonprofit’s mission.
  5. Generating Funds and Ensuring Financial Stability: Alongside verifying the appropriate distribution of funds, the board also has a responsibility to generate more assets to create a solid foundation for the nonprofit’s long-term financial stability.
  6. Supporting and Evaluating the CEO/Executive Director: A nonprofit’s board of directors not only serves as a support system for the CEO/executive director, but also assesses their job performance.
  7. Ensuring the Organization Follows Legal and Ethical Practices: It comes as no surprise that upholding the ethics of a nonprofit is essential to its success in achieving its mission. In this case, the board’s task involves ensuring the organization consistently follows legal and ethical practices across its operations.
  8. Generating a Positive Public Image: Building trust within the community not only attracts private investors, but also develops credibility among community members who may use the services your organization offers.
  9. Acknowledging and Addressing Conflicts of Interest: The Internal Revenue Service (IRS) requires nonprofits to develop a written conflict of interest policy that the organization’s board of directors will enforce. This prevents any board member from using their position in order to serve their personal interests.

Additional Legal Responsibilities

In Louisiana, a nonprofit’s board of directors also must fulfill certain legal responsibilities. The three most common legal responsibilities of a Louisiana nonprofit include duty of care, duty of loyalty, and duty of obedience.

  • Duty of Care: This involves making appropriate use of the assets held by the organization. Specifically, board members must ensure the use of such funds promotes the good of the organization and those who benefit from its services.
  • Duty of Loyalty: This involves acknowledging and disclosing any conflicts of interest as well as making decisions that benefit the nonprofit as a whole rather than a single board member.
  • Duty of Obedience: Board members also must ensure the nonprofit adheres to all applicable laws and regulations while operating under the mission and bylaws that form its foundation.

Developing Your First Board of Directors

If you’re still in the process of developing your Louisiana nonprofit entity, choosing the right board members is key to ensuring the effectiveness and stability of your organization. Here are a few tips to help you get started:

  • Solidify Roles. Designating functional roles for individual board members — outside of your elected officer’s roles — can improve the board’s overall effectiveness and functionality.
  • Develop and Commit to Bylaws. Creating a set of bylaws to uphold the mission of your organization creates a strong foundation to guide board members’ decision-making. In addition, state law may require Louisiana nonprofits to develop bylaws.
  • Prioritize Your Mission. Another beneficial strategy when choosing board members is to seek candidates with a passion for your organization’s mission and goals.
  • Acknowledge Any Conflicts of Interest. Conflicts of interest will inhibit a board member’s ability to effectively uphold the values and best interests of your organization. That makes it extremely important to assess potential or existing conflicts of interest when evaluating board members for your nonprofit.

Filling Board Vacancies

Vacancies in a Louisiana nonprofit’s board of directors can be filled according to Section 224 of the Nonprofit Corporation Law:

(3) The remaining directors, even though not constituting a quorum, may, by a majority vote, fill any vacancy on the board (including any vacancy resulting from an increase in the authorized number of directors, or from failure of the members to elect the full number of authorized directors) for an unexpired term, provided that the members shall have the right to fill the vacancy at any special meeting called for the purpose prior to such action by the board.

Putting It Into Practice

When electing new members to your Louisiana nonprofit’s board of directors, focus on finding individuals dedicated to your organization’s mission. Here are a few tips to consider as you begin your search:

  • Look to Your Volunteers. Volunteers who stand out can make excellent additions to a board of directors. These individuals already dedicate their time and energy to your organization and most likely will bring that same dedication and goodwill to your board.
  • Explore Candidates Among Loyal Donors. Donors represent another group to consider when electing new board members because they create the financial foundation for your organization. That means they have a track record of dedicating time and money to ensuring the success and sustainability of your nonprofit.
  • Expand Your Search. Diversifying your search to include outside groups can prove effective in creating a well-rounded board of directors.

What Are Elected Officers?

Section 225 further outlines the election of officers to the board:

A.(1) The board of directors shall elect a president, a secretary and a treasurer, and may elect one or more vice presidents. Unless otherwise provided in the articles, none of said officers need be a director, and any two of these offices may be combined in one person; provided that no person holding more than one office may sign, in more than one capacity, any certificate or other instrument required by law to be signed by two officers. The treasurer may be a corporation.

(2) If the officers are listed in the articles or in an amendment thereto, a municipal address, which shall not be a post office box only, shall be indicated for each such officer.

B. Such other officers and agents as may be necessary for the business of the corporation may be appointed by the board of directors or in the manner provided in the by-laws.

Putting It Into Practice

Elected officers are members of the board with assigned roles focused on regulating the day-to-day activities of the organization and maintaining its success. Each position should have a clear role defined in the organization’s bylaws.

The board of directors is required to nominate elected officers in Louisiana. Elected officer roles can not only prove helpful in ensuring the effectiveness of the board of directors, but also provide a foundation of leadership.

The two elected officers required for nonprofits in Louisiana include:

  • President: As the leader of the board, the president commonly has authority over key activities like signing contracts and hiring or firing employees. This role differs from the CEO/executive director position, which the board typically hires after assigning the president role.
  • Secretary: This individual serves as the organizer of the board meetings, which may include scheduling the meetings, informing board members of the meeting schedule, planning the meeting agendas, and recording meeting minutes.

Note: A single member can hold two or more elected positions in Louisiana. However, any document or contract that requires the signatures of two officers will need two different people to sign. 

Conclusion

Forming a board of directors is an essential part of creating and operating a nonprofit in Louisiana. Ideally, this group will advocate for your organization’s best interests in everything from finances to public relations. To form or expand a board of directors that will best represent your nonprofit’s needs, search for members who will uphold your organization’s mission and purpose.

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