Governance provides the foundation with a mission statement; a sense of purpose and direction; policies to cover operations and grantmaking; and the wherewithal to accomplish the job. Unlike many other non-profit organisations, foundations do not have members1. Instead, they are governed by a board of directors, which has to ensure that the foundation’s resources are being used for legally acceptable public purposes and for fulfilling its mission according to its stated purpose. While the exact structure and name for this body may vary from one European country to another, all of them provide for its authority.
Role of the board
The board’s fundamental responsibilities are ensuring the compliance of the foundation with the law and the organisation bylaws; to determine and monitor the foundation’s programmes and policies, checking if they are consistent with the stated mission and purposes as well as the foundation’s resources. Other responsibilities include2: to ensure that financial resources of the foundation are managed effectively and properly; to ensure that the foundation has a regularly updated mission statement; to select new board members; to select the Chief Executive, to support his/her work and evaluate his/her performance; to ensure effective strategic and organisational planning; to enhance the foundation’s public image by, among other strategies, having a board member, most often the chair, be the foundation’s spokesperson; and to assess its own performance as a foundation’s board. That supervisory function requires a broad knowledge of the foundation’s financial and programme operations.
Board setting-up
Everywhere in Europe, setting up a foundation requires the drafting of a deed of constitution and governing documents (called ‘statutes’ or ‘bylaws’). Either the deed or the statutes must contain the rules under which the foundation will be governed3. However, the relevant laws in European countries contain very few requirements with respect to a foundation’s internal governance.
Board composition
In Austria as well as in Switzerland, the minimum size of the board is one person. In Italy, at least two members must serve on the governing board (i.e. the president and another person). The Spanish law4 requires a minimum of three board members. The French law is an exception to the recognition of the founder’s will since a maximum of 12 members is permitted for the board5. In short, a single board or council usually governs foundations, and most countries allow the board to be composed of a single member6.
The rules regarding the renewal of the board, which have to be defined within the statutes, could be different according to the type and size of the foundation. For small foundations, the time-consuming task of identifying new members and the disruption to board continuity may present costs that far outweigh the benefits gained from a regular renewal of the governing body. Conversely, for a large foundation, terms and mandatory retirement ages may be essential for long-term institutional effectiveness.
Board member remuneration
In some countries, like Ireland, payment of fees and/or salaries is prohibited. Generally, with very few exceptions, board members are volunteers and may have, but not always, their expenses reimbursed. Board member compensation and the amount thereof are often related to the size and activities of the foundation. Compensation is considered as appropriate, as long as it is reasonable and bears a relationship to services rendered.
Board member profiles
The type7 and the size of foundation also have an impact on the member profiles of the board. For example, in the case of an independent family-controlled foundation, family members or descendants of the donor(s) comprise the majority of positions on the governing board. This is not the case of other independent foundations in which the majority of directors/trustees have no relation to the donor(s) family. For community foundations, it is very helpful to be governed by a board that is representative of the whole community. Within the governing boards of corporate foundations, the majority of directors/trustees are often (retired) employees or board members from the donor company. When the foundation is governmentally linked, key positions on the governing board are determined by a governmental body.
The profiles of board members will also depend on the activities of the foundation. While they do not have to be experts in every area of interest, a certain level of knowledge and understanding is essential in some cases. For example, it would be irresponsible to allow a foundation devoted to medical research to operate without board members possessing the ability to judge the need for, and quality of, its work. In the same line, if a foundation is focused on public policy, the presence of respected politicians on its board will add credibility to its work. A board also needs people with competency in foundation management, especially few members to serve on audit committees or other specialised board bodies that ensure the wise deployment of foundation resources.
>Back To Who runs foundations?
[1] In non-profit organisations like associations, the most important decisions are often made by the membership assembly.
[2] Ten basic responsibilities of nonprofit boards / Richard T. Ingram. - 10th. - Washington, DC : National Center for Nonprofit Boards, 1995. - 22 p. - (NCNB Governance Series Booklet).
[3] The deed usually expresses the donor’s will to establish a foundation. In providing for the endowment and the appointment of directors, the statutes are a more detailed document setting out the internal organisation and governance of the foundation.
[4] Spanish Foundation Act 50/2002 states in Article 15
[5] Art. 3 of the model statute of the Conseil d’Etat.
[6] See EFC Foundations’ Legal and Fiscal Country Profiles
[7] See 
EFC Typology of foundations in Europe