Fiduciary Responsibility of Volunteer Board Members: What Church and Ministry Leaders Should Be Paying Attention To

Fiduciary Responsibility of Volunteer Board Members

Churches and ministries are often blessed with faithful men and women who are willing to serve on boards, councils, and committees out of a sense of calling rather than compensation. These volunteer leaders play a vital role in protecting the mission, stewarding resources, and providing accountability. In California, however, volunteer service does not mean informal service—boards are often legal governing bodies, and directors’ responsibilities should be taken seriously.

For pastors and ministry executives, understanding fiduciary responsibility is not only about protecting the organization. It is about properly equipping those who have agreed to carry that responsibility.

Volunteer Does Not Mean Informal (and protections are not absolute)

While ministry boards are mission-driven, they are also legal governing bodies. Volunteer board members owe enforceable fiduciary duties to the organization. These duties apply regardless of whether a board member is paid, ordained, or serving purely in a volunteer capacity.

This means church leadership should not view the board as simply advisory or symbolic. Boards are legally responsible for oversight of finances, compliance, and organizational direction. Clear structures and documented processes are essential.

The Core Fiduciary Duties Ministries Should Teach Their Boards

Although the language varies, fiduciary responsibility generally centers on three core duties. Ministry leaders should regularly educate and remind their boards of these obligations.

1. Duty of Care – Active, Informed Oversight

The duty of care requires board members to act attentively and responsibly in overseeing the ministry.

From a leadership perspective, this means ensuring that board members:

• Receive accurate and understandable financial reports
• Attend meetings regularly and are prepared
• Understand major programs, risks, and operational realities
• Ask questions and seek clarification
• Participate meaningfully in decision-making

For ministries, this includes oversight of donations, restricted gifts, payroll, facilities, child safety practices, and major contracts.

Leaders should view it as their responsibility to provide boards with the information and structure needed to fulfill this duty effectively.

2. Duty of Loyalty – Protecting the Ministry’s Interests and Integrity

The duty of loyalty requires board members to place the interests of the ministry above personal, business, or relational interests.

Church and ministry leaders should pay close attention to:

• Conflicts of interest
• Related-party transactions
• Employment or contracting decisions involving friends or family
• Use of ministry resources

Healthy ministries normalize transparency. Conflict disclosures, recusal practices, and written policies are not signs of distrust—they are safeguards that protect the ministry, its leadership, and its witness.

3. Duty of Obedience – Faithfulness to Mission and Legal Responsibilities

The duty of obedience focuses on ensuring the ministry operates consistently with its mission, governing documents, and the law.

This includes board oversight of:

• Compliance with corporate and tax-exempt requirements
• Proper use of donations and restricted funds
• Adherence to bylaws and internal policies
• Alignment between ministry activities and stated purpose

For churches and ministries, this duty reflects both legal stewardship and spiritual stewardship.

Where Ministry Leaders Should Be Especially Intentional

Most ministry board problems do not arise from bad motives. They arise from unclear roles, informal processes, and insufficient documentation.

Leaders should be especially intentional about:

• Board orientation and training – New board members should be educated on fiduciary duties, governance structure, and expectations.
• Financial transparency – Regular financial statements, budgets, and reserve planning should be reviewed with the board.
• Risk management systems – Insurance, safety protocols, child protection policies, and compliance processes should be actively monitored.
• Clear documentation – Minutes, approvals, and policies should reflect thoughtful oversight.
• Defined boundaries – Distinguishing between pastoral leadership, staff authority, and board governance prevents confusion and conflict.

Boards cannot fulfill fiduciary responsibilities if they are not given clarity, information, and appropriate access.

Why This Matters for Churches and Ministries

When legal or financial issues arise, regulators, donors, insurers, and courts often look beyond staff and examine the board’s role.

They ask questions such as:

• Was the board informed?
• Did the board provide oversight?
• Were risks identified and addressed?
• Were decisions properly approved and documented?

Strong governance is not about bureaucracy. It is about protecting the mission, the congregation, the leadership team, and the individuals who have stepped forward to serve.

A Closing Thought for Ministry Leaders

At Tyler Law, LLP, we regularly work with churches and ministries on governance reviews, board training, fiduciary education, and risk management structures. Periodic evaluation of board processes and policies can be an important step in protecting both your ministry and the individuals who serve it.