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This is part of an ongoing series revisiting the appendix of 50 challenges from Managing Your Nonprofit for Resilience (2022). Challenge 24: Lack of Board Governance Expertise
I’ve had good-hearted board members tell me they sat through years of meetings before anyone mentioned fiduciary duty. They had no idea what it meant. They weren’t careless or disengaged — they’d been recruited because they cared about the mission and knew people in the community. Nobody told them that sitting on a nonprofit board carries legal obligations. Nobody explained that “duty of care” means you’re supposed to scrutinize the financial statements, not just glance at the bottom line.
They’re not unusual. According to BoardSource’s Leading with Intent research, 51% of board chairs say they received no specific preparation before taking over the role. Three out of four board members serve without meaningful governance training.
In the previous posts on Challenge 23, I wrote about relative competence — the broader question of whether your board members bring the right skills and engagement to the table. This challenge is narrower and more specific. Your board may include a retired CFO, a marketing director, and a community organizer — all accomplished in their fields. But none of them may have ever learned how a nonprofit board is supposed to function. Governance is its own discipline. And almost nobody teaches it to the people we ask to do it.
Nonprofit governance requires a specific body of knowledge that most board members never acquire. The three fiduciary duties — care, loyalty, and obedience — and what each one demands in practice. The difference between governance (the board’s job) and management (the executive director’s job). How to read a nonprofit financial statement and a Form 990. What your state attorney general can do if the board is negligent. How to evaluate an executive director against strategic goals rather than gut feeling.
Most boards handle this gap with a brief orientation: here’s a binder, here’s the mission statement, here’s when we meet. BoardSource found that 69% of organizations rely exclusively on written materials for board education — and nothing else. Interactive training — workshops, facilitated discussion, case-based learning — is rare. The binder goes on a shelf. The knowledge gap persists.
This is a systems failure, not a character problem. We recruit volunteers into positions of legal and fiduciary responsibility and then hand them a folder instead of an education.
When board members don’t understand their governance role, the consequences are specific.
Financial problems go undetected. Members who can’t interpret a cash flow statement or spot irregularities in a Form 990 provide no real financial oversight. At Casa Ruby, an LGBTQ nonprofit in Washington, D.C., the board failed to maintain even basic financial review. When the organization collapsed and a receiver was appointed, the investigation found no evidence that board members had reviewed financial statements, challenged management decisions, or assessed organizational risk. The receiver sued the board. A DC court dismissed claims against most members, but the legal outcome is beside the point — Casa Ruby ceased operations, its clients lost services, and the organization’s name became a cautionary tale.
Strategic decisions happen without real deliberation. A board that doesn’t understand where governance ends and management begins can swing between approving every executive proposal without scrutiny or attempting to run operations directly. Both patterns produce bad outcomes — either the board is a rubber stamp or it’s a bottleneck.
Critical questions don’t get asked. The board’s job includes pressing on uncomfortable territory: Is our cash reserve adequate if a major funder pulls out? What happens if the executive director leaves tomorrow? Are we in compliance with our grant requirements? When board members don’t know these questions are their responsibility, the questions go unasked. Risks accumulate in silence.
And since I wrote about this challenge in 2022, the stakes have risen. Boards are now expected to weigh in on AI adoption, cybersecurity, and data privacy — subjects most board members weren’t recruited to understand. The 2025 federal grant freeze forced a question many boards couldn’t answer: How much of our revenue depends on federal sources, and what happens if that shifts? Meanwhile, post-pandemic turnover drained the institutional memory that sometimes compensated for the lack of formal training. Experienced members who quietly mentored new arrivals cycled off, and their replacements arrived during a period when onboarding was minimal.
Here’s where I want to reframe this challenge. The usual approach is to treat governance training as risk mitigation — do it so bad things don’t happen. That’s true but incomplete. Boards that actually invest in governance expertise don’t just avoid disasters. They become capable of things that untrained boards can’t do at all.
They ask the questions that change strategy. A board member who understands the duty of loyalty will ask whether a proposed partnership truly serves the mission or just generates revenue. A board that knows how to read financial trends — not just this quarter’s numbers — will spot the slow decline in a revenue stream before it becomes a crisis. These aren’t defensive moves. They’re strategic ones.
They hold the executive director accountable without micromanaging. In years of nonprofit consulting, I’ve heard the same complaint from nearly every executive director: the board either ignores them or second-guesses every decision. Both problems stem from the same root: board members who don’t understand the governance-management boundary. When that boundary is clear — when board members know their job is to set direction, evaluate performance against goals, and ensure resources are adequate — the relationship between board and ED becomes productive rather than adversarial.
They attract better board members. This is the reinforcing cycle that works in your favor. A well-governed board is a board that serious professionals want to join. Good board members recruit other good board members. When your board meetings are substantive, when expectations are clear, when members feel their time is respected — word gets out. The cycle that used to reinforce ignorance starts reinforcing competence.
If you’re an executive director or a board chair reading this, here are three things you can do in the next 30 days.
Invest in structured governance education. Not a binder. Not a one-hour orientation. Actual curriculum. BoardSource’s Certificate of Nonprofit Board Education is a four-module, on-demand program that covers fiduciary duties, the board-ED partnership, committee structure, and executive transitions. NeighborWorks launched an 18-month Excellence in Governance Academy in 2024. Your state nonprofit association likely offers workshops. Pick one and commit to it. The cost of training a board is a fraction of the cost of a governance failure.
Separate governance expertise from professional expertise in your recruitment. When you recruit new board members, stop asking only “what professional skills do they bring?” Start asking “do they understand how boards work — and if not, how will we teach them?” Build governance training into the first 90 days of every new member’s service, not as optional enrichment but as a requirement. Some boards now require completion of a governance course before a new member’s first vote. That’s not excessive — it’s responsible.
Name the gap out loud. At your next board meeting, ask this question: “How many of us can name the three fiduciary duties of a nonprofit board member?” Don’t ask for a show of hands — just let the silence do its work. Then use that moment to propose a governance development plan. The single most important step is acknowledging that the gap exists, because most boards have never done even that.
This challenge is solvable. Unlike some of the structural problems in the nonprofit sector — chronic underfunding, political headwinds, donor fatigue — governance expertise is largely within your control. It takes time, it takes commitment from the board chair, and it may require budget you’d rather spend elsewhere. But nobody outside your organization has to change. No funder has to approve it. No policy has to shift. You just have to decide that the people governing your organization deserve to be prepared for the job.
Governance training alone won’t fix a board plagued by personality conflicts or power imbalances — those are different challenges. But it’s the foundation. A board that understands its role is far better positioned to address everything else. I cover board governance regularly in the Nonprofit Good News newsletter, and in more depth in NGN Premium.
The payoff isn’t just avoiding the next Casa Ruby. It’s building a board that can see around corners, ask the right questions, and help your organization spring forward — not just bounce back.
Ted Bilich is the author of Managing Your Nonprofit for Resilience and founder of Risk Alternatives, a consultancy helping nonprofits build organizational resilience. He publishes the Nonprofit Good News newsletter, which gives busy nonprofit leaders concrete steps to strengthen their organizations.