Board of Trustees vs. the Board of Directors

The board of trustees is a public organization that oversees financial, legal, and organizational activities. Take a look at the comparison of the board of trustees and the board of directors below.

What Should You Know About the Board of Trustees?

It is often said that an organization takes on the traits of its leader over time. Usually, at school, this statement is used when they want to express praise to the founding director of the educational institution or the head of administration: the imprint of the personality of this person really remains on the whole school. However, the same applies to the board of trustees. Behind good companies there are usually very influential, high-quality boards of trustees, whose leadership style and modeling of a biblical mode of action inspire the school staff to do their best to meet the expectations placed on them.

The board of trustees represents:

  • A non-governmental, public, non-profit organization that unites on a voluntary basis those who are interested in the development of education and a particular educational institution.
  • Two of its legal statuses are possible: with the formation of a legal entity and without its formation.
  • The procedure for the activities of the board of trustees is determined by the relevant regulation, which is approved by the founder (founders) of the educational institution.
  • The board of trustees is formed depending on the goals and objectives of the educational institution.
  • On the recommendation of the relevant authorities, it may include representatives of state and local executive authorities, business, financial and scientific circles, the media, public associations, and associations, enterprises, organizations, and institutions, regardless of ownership, including foreign ones.

The board of trustees usually includes key individuals involved in the management of the organization. Other persons may be appointed or elected on the basis of their knowledge and experience in areas relevant to the management of the organization. The board of directors often includes both internal and external trustees.

Why Is It Important to Build a Strong Board of Directors Team?

It takes people who have more than just a desire to do good to run the board of directors’ organization effectively—collect, manage, and use its funds. She needs professionals with business skills. So if you’ve studied business, economics, finance, or accounting and want to do something other than move up the corporate ladder, consider nonprofits. Also, qualified writers and marketers are always in demand. After all, in order to raise funds, you need to prepare texts and build communication with sponsors.

As a result of the crisis, the owners of many companies began to think more about the need to improve the internal efficiency of their business. The crisis made many think about what corporate governance can give as a means of building a well-functioning business management system. The separation of ownership and control is carried out not through the dispersion of ownership, but through the separation of ownership, management, and control functions performed by owners, management, and board members.

The board of directors has the greatest influence on important decisions in the company. The strong influence of the board of directors is inherent in more than 60% of large joint-stock enterprises. Significant influence of the board of directors was noted in more than 70% of joint-stock companies, in which the functions of ownership and management are separated. Significant influence without separation of functions was noted in 64% of joint-stock companies.