how a board of trustees works
a board of trustees typically includes key individuals involved with the management of an organization other individuals may be appointed or elected based on their expertise and experience in areas pertaining to the management of the organization the board will often have a mix of internal and external trustees a board of trustees is similar to a board of directors and may act as such in some organizations a board of trustees is more commonly found in private organizations entities with boards of trustees include mutual savings banks universities university endowments art museums and associations the phrase board of trustees can often be used interchangeably with board of directors board of governors or board of regents some entities such as public corporations and mutual funds may have requirements designated by industry regulations that pertain to the oversight and obligations of the board of trustees in some cases the board of trustees may be a special group tasked with managing a designated portion of a comprehensive organization the framework for a board of trustees is typically set by regulatory obligations and entity direction outlined in an organization s bylaws a board of trustees can range from three to 30 individuals boards are often divided into subcommittees which can help to manage target areas of an entity while also providing for some segregation of power the board of trustees often will be responsible for holding in trust the funds assets or properties that belong to others with a fiduciary duty to protect them two leading entities using the structure of a board of trustees include university endowments and mutual savings banks university endowmentsa university endowment may have a special board of trustees that is responsible for the oversight and management of a portfolio of assets known as an endowment the board of trustees has a fiduciary responsibility to manage the funds in the best interest of all stakeholders the board may choose to invest the endowment assets across a range of investments utilizing the services of various institutional managers in managing the endowment assets it may also choose to work with a single institutional manager in a separate account structure or take on the full duties of managing the assets itself regardless of the structure of an endowment portfolio the board of trustees has fiduciary responsibility for making all of the endowment s investment decisions mutual savings banksmutual savings banks have boards of trustees who ensure that the interests of the depositors borrowers and members of the community in which they serve are considered and protected by bank management the board has the duties of making sure that customers deposits are secured and invested safely interest is paid to depositors and customers principal is available to them on request 