Officer vs. Director Roles: Clarifying Titles and Authority in Nonprofit Structures

Many nonprofit organizations use the terms director, trustee, and officer interchangeably — but under the law, these titles carry very different meanings and legal responsibilities.
Understanding who does what is essential for compliance, accountability, and effective governance.

At Good Pine P.C., we help nonprofit boards and executives in New York and New Jersey establish clear governance structures that align with both state law and IRS expectations.

Understanding the Nonprofit Hierarchy

Every nonprofit corporation — whether formed in New York or New Jersey — has two primary governing levels:

1. The Board of Directors (or Trustees) — the governing body responsible for major decisions, oversight, and fiduciary duties.

2. Officers — the executive agents appointed by the board to carry out day-to-day operations.

This division is required by law and is fundamental to how nonprofit corporations maintain accountability and transparency.

1. The Role of the Board: Directors or Trustees

In New York, the governing body is called a Board of Directors.
In New Jersey, the equivalent body is the Board of Trustees — though in function, they are the same.

Legal Authority

• N.Y. Not-for-Profit Corporation Law §701:
  “A corporation shall be managed by its board of directors.”

• N.J.S.A. 15A:6-1:
  “The business and affairs of a corporation shall be managed by its board of trustees.”

In both states, the board is the ultimate decision-making authority within the organization. It holds the fiduciary duties of care, loyalty, and obedience, ensuring that the nonprofit’s mission is carried out in compliance with law and donor intent.

Typical Board Responsibilities

• Approving the organization’s budget and major financial commitments

• Hiring, evaluating, and (if necessary) removing the executive director or CEO

• Adopting and amending bylaws and key governance policies

• Overseeing compliance with IRS and state reporting requirements

• Safeguarding the organization’s mission and charitable assets

Directors and trustees serve as fiduciaries, not as operational managers. They set direction, but they do not run daily programs.

2. The Role of Officers: Managing Daily Operations

Officers are appointed by the board to implement its policies and manage day-to-day operations.
Their powers come from the bylaws or from resolutions adopted by the board.

Common Officer Titles

Most nonprofits designate at least three core officers:

• President or Chair – serves as chief executive of the corporation and presides over board meetings.

• Secretary – maintains corporate records, meeting minutes, and filings.

• Treasurer – oversees financial management and reporting.

Some organizations also create additional officer roles such as:

• Vice President – assists the president and acts in their absence.

• Executive Director (or CEO) – often a paid staff member responsible for carrying out programs and managing employees.

Legal Standing

Officers are agents of the corporation, not fiduciaries in the same sense as directors.
They act under the board’s authority and can bind the organization only within the powers granted by the bylaws or board resolutions.

3. Key Differences Between Officers and Directors

Governance vs. Management

• Directors/Trustees: Set mission, strategy, and policy.

• Officers: Execute and manage programs, budgets, and operations.

Appointment and Removal

• Directors: Elected or appointed under the bylaws (often by the board itself or, in membership organizations, by members).

• Officers: Appointed and removable by the board at any time.

Fiduciary Duties

• Directors: Owe fiduciary duties of care, loyalty, and obedience to the corporation.

• Officers: Owe duties of care and loyalty in executing board directives.

Compensation

• Directors: Typically serve without compensation (except reimbursement of expenses).

• Officers: May be compensated if employed by the organization, provided the board approves and documents the arrangement consistent with conflict-of-interest policies.

4. The Executive Director or CEO: Hybrid Role Explained

Many nonprofits have a paid Executive Director (or CEO).
This position often causes confusion because the title suggests authority — but legally, the executive director is an officer and employee, not a director.

In Practice:

• The board governs; the executive director manages.

• The executive director reports to the board, not the other way around.

• The board should evaluate the executive director’s performance annually, based on measurable goals aligned with the nonprofit’s mission.

The executive director may attend board meetings and offer input but should not vote unless explicitly authorized by the bylaws (and even then, it is generally discouraged to preserve independence).

5. Common Governance Mistakes

1. Blurring the line between oversight and management.
   Directors should not micromanage staff or operations.

2. Failing to document officer authority.
   Every officer’s powers should be written in the bylaws or a board resolution.

3. Combining incompatible roles.
   The same person should not serve as Board Chair and Executive Director — it undermines internal controls.

4. Neglecting fiduciary training.
   New board members should receive orientation on legal duties and reporting requirements.

6. Best Practices for Compliance

• Review and update bylaws every 2–3 years.

• Keep board and officer rosters current in all state filings.

• Maintain written conflict-of-interest and whistleblower policies.

• Conduct periodic board self-assessments and officer performance reviews.

• Ensure minutes clearly reflect who voted, who abstained, and what authority was delegated.

These practices not only strengthen accountability but also protect directors and officers under the business judgment rule.

Conclusion

A well-structured nonprofit separates governance (the board) from management (the officers).
When each role is properly defined and documented, the organization functions efficiently, avoids internal conflict, and remains compliant with state and federal law.

Good Pine P.C. advises nonprofit boards and executives in New York and New Jersey on governance, bylaws, compliance, and fiduciary responsibility — helping mission-driven organizations operate with confidence and clarity.

Legal Disclaimer

This article is provided by Good Pine P.C. for general informational purposes only and does not constitute legal advice. Reading this article does not create an attorney–client relationship. Laws and regulations may change, and their application depends on specific facts and circumstances. You should consult a qualified attorney before taking any action based on this information.