Under well-established principles of not-for-profit corporation law, a board member must meet certain standards of conduct and attention in carrying out his or her responsibilities to the organization. Several states have statutes adopting some variation of these duties, which would be used in court to determine whether a board member acted improperly. These standards are usually described as the duty of care, the duty of loyalty, and the duty of obedience.

Duty of Obedience

The duty of obedience requires board members to be faithful to the organization's mission. Although board members may exercise their own reasonable judgement concerning how the organization should best meet its mission, they are not permitted to act in a way that is inconsistent with the central goals of the organization. The rationale for this rule is based in part on the fact the not-for-profits rely heavily on the public" trust when used for the purpose for which it was given.

Duty of Care

The duty of care describes the level of competence that is expected of a board member. Although historically there has been considerable debate about whether the standard of care for a not-for-profit organization should differ from that for a for-profit corporation, today it is fairly settled that the standard of care is the same. The most commonly expressed standard is that a board member owes the duty of "care that an ordinary prudent person would exercise in a like position and under similar circumstance."

Duty of Loyalty

The duty of loyalty is a standard of faithfulness to the organization. The fundamental duty of loyalty owed by a board member is the duty to give undivided allegiance to the organization when making decisions affecting the organization. This means that a board member can never use information obtained as a member for personal gain, but must act in the best interests of the organization.