CNE Board Development & Governance 2 — Questions and Answers
Question 1: Which document primarily defines the internal governance rules and operating procedures of a nonprofit board?
- Articles of incorporation
- Bylaws (Correct answer)
- Strategic plan
- Form 990
Correct answer: Bylaws
Bylaws are the governing document that outlines board structure, meeting procedures, officer roles, and voting rules.
Question 2: A nonprofit board member who also owns a company that sells supplies to the organization has a duty to:
- Automatically recuse from all board votes
- Disclose the relationship and recuse from related decisions (Correct answer)
- Resign from the board immediately
- Negotiate a lower price on behalf of the nonprofit
Correct answer: Disclose the relationship and recuse from related decisions
Conflict of interest policies require disclosure and recusal from decisions where a personal financial interest exists.
Question 3: What is the primary purpose of an executive session during a board meeting?
- To vote on the annual budget without staff present
- To allow the board to discuss sensitive matters confidentially (Correct answer)
- To exclude board members with conflicts of interest
- To conduct strategic planning with outside consultants
Correct answer: To allow the board to discuss sensitive matters confidentially
Executive sessions provide a confidential setting for the board to discuss personnel, legal, or other sensitive issues.
Question 4: Which governance practice best ensures board decisions reflect the full board's input rather than a single leader's preferences?
- Giving the board chair veto power over agenda items
- Distributing meeting materials at least 48–72 hours in advance (Correct answer)
- Limiting board meeting frequency to once per year
- Delegating all decisions to standing committees
Correct answer: Distributing meeting materials at least 48–72 hours in advance
Advance distribution of materials allows all board members to review information, prepare questions, and participate meaningfully.
Question 5: Under the duty of loyalty, a board member must prioritize the interests of:
- Their professional network
- The nonprofit's mission and stakeholders (Correct answer)
- Major donors who funded their recruitment
- The executive director's strategic vision
Correct answer: The nonprofit's mission and stakeholders
The duty of loyalty requires board members to act in the best interest of the organization, not personal or third-party interests.
Question 6: A nominating committee's primary function in board development is to:
- Set compensation for new board members
- Identify, vet, and recommend candidates for board seats (Correct answer)
- Conduct annual performance reviews of all board members
- Approve the strategic plan before it goes to the full board
Correct answer: Identify, vet, and recommend candidates for board seats
The nominating committee manages the pipeline of prospective board members, assessing skills gaps and vetting candidates.
Question 7: When a nonprofit's bylaws conflict with state nonprofit corporation law, which generally takes precedence?
- The bylaws, because they are more specific to the organization
- State law, because it supersedes organizational documents (Correct answer)
- The conflict of interest policy, as the most recent document
- IRS regulations, as the federal authority
Correct answer: State law, because it supersedes organizational documents
State nonprofit corporation law is the legal authority; bylaws may customize governance only within the bounds that state law permits.
CNE Board Development & Governance 2
Which document primarily defines the internal governance rules and operating procedures of a nonprofit board?