CNC Board Recruitment & Orientation 3 — Questions and Answers
Question 1: Which governance principle requires that board members act in the best interest of the nonprofit rather than personal gain?
- Duty of obedience
- Duty of loyalty (Correct answer)
- Duty of care
- Duty of transparency
Correct answer: Duty of loyalty
The duty of loyalty obligates board members to put the organization's interests above their own personal or professional interests.
Question 2: A prospective board member discloses during screening that she sits on the board of a competing nonprofit. The recruitment committee should:
- Immediately disqualify her from consideration
- Explore the nature of any potential conflicts and determine whether they are manageable (Correct answer)
- Accept her without conditions since dual board service is always permitted
- Ask her to resign from the other board before any further discussion
Correct answer: Explore the nature of any potential conflicts and determine whether they are manageable
The appropriate step is to assess the actual conflict's scope and decide whether recusal procedures or other safeguards make dual service workable.
Question 3: Under IRS Form 990 requirements, a nonprofit must publicly disclose which of the following related to its board?
- Board members' personal financial statements
- Names, titles, and compensation of officers and key employees (Correct answer)
- Board members' private email addresses
- Minutes from executive session discussions
Correct answer: Names, titles, and compensation of officers and key employees
Form 990 requires disclosure of names, titles, hours worked, and compensation for officers, directors, and key employees.
Question 4: Which question is MOST appropriate to ask a board candidate during a recruitment interview?
- How many hours per week can you donate to our events?
- What expertise do you bring that aligns with our current strategic priorities? (Correct answer)
- Do you plan to make a major financial gift in your first year?
- Will you commit to serving at least three consecutive terms?
Correct answer: What expertise do you bring that aligns with our current strategic priorities?
Asking about expertise alignment with strategic priorities helps assess the candidate's fit and potential governance contribution.
Question 5: An effective board orientation package should include all of the following EXCEPT:
- Current strategic plan and budget
- Personnel files of senior staff members (Correct answer)
- Bylaws and board policies
- Recent financial statements and audit
Correct answer: Personnel files of senior staff members
Personnel files are confidential HR documents and are not appropriate board orientation materials; governance documents and financials are.
Question 6: What is the primary purpose of term limits in nonprofit board governance?
- To reduce legal liability for individual board members
- To promote leadership renewal and prevent entrenchment (Correct answer)
- To comply with federal tax-exempt requirements
- To limit the number of committees a board can form
Correct answer: To promote leadership renewal and prevent entrenchment
Term limits create regular turnover that refreshes perspectives, skills, and energy while guarding against over-concentration of influence.
Question 7: During a board orientation session, which financial document gives new members the clearest picture of the organization's current fiscal health?
- The prior year's Form 990
- The most recent balance sheet and income statement (Correct answer)
- The five-year capital campaign plan
- The donor acknowledgment letter template
Correct answer: The most recent balance sheet and income statement
The balance sheet shows assets, liabilities, and net assets, while the income statement shows revenue and expenses — together they depict current fiscal health.
CNC Board Recruitment & Orientation 3
Which governance principle requires that board members act in the best interest of the nonprofit rather than personal gain?