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| Governance | | As is evidenced in the new IRS Form 990, nonprofit governance is of increasing interest and importance. The following standards are intended to help ensure that a nonprofit has a strong system of governance, good management practices and policies, and regularly assesses its mission against its programmatic accomplishments.
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Board Meetings
A fundamental element of a successful nonprofit is an active and engaged governing board that sets the strategic agenda and takes responsibility for the organization’s mission and programs...More |
Conflict of Interest Policy
The board's deliberations on important matters should be free of bias from board members or key employees who may have a personal interest in the outcome. A nonprofit should have a policy that addresses conflicts of interest of its board members and key employees. A conflict of interest policy helps ensure independent decision-making and guards against inappropriate benefit to board members or key employees from organizational transactions...More |
Voluntary Board Service
Voluntary board service affirms that the nonprofit exists to provide a public good and not to serve an individual or group of individuals. Most donors and nonprofits expect that board members serve without compensation. A nonprofit should also take steps to ensure that any expense reimbursements for board service are reasonable...More |
Separation of Roles
Governance checks and balances are diluted and the ability of the board and its officers to act independently is compromised when more than one paid staff member serves on the governing board, its chair or treasurer is a paid staff member, or if one board member simultaneously serves as chair and treasurer...More |
Board Length of Service
A well-governed nonprofit utilizes a deliberate board nominating process that does not perpetuate the status quo. Limits on the length of board terms help to ensure that the board is accountable for the mission and the financial health of the organization. Changes in board membership allow for greater participation by the communities served and for boards to recruit new expertise as the needs of the nonprofit change...More |
Diversity and Inclusivity
The nonprofit sector plays a unique and critical role in our society, including providing an avenue for individual involvement to better society and offering equal access to opportunity and services. As such, an inclusive nonprofit seeks and embraces diversity in all its forms and is responsive to the changing demographics of the larger society...More |
Board Composition
A nonprofit board should be comprised of individuals representing the community and constituents served by its mission. The board should also include members with expertise gained through professional or personal experiences that are beneficial to the mission. A nonprofit should plan for the future and regularly use board evaluation tools to plan and manage succession and assess capacity and expertise to effectively govern...More |
Board Orientation, Education and Assessment
An effective board of directors is engaged in the nonprofit's mission and possess a sound knowledge and understanding of the nonprofit's operations and finances. A process to orient and educate board members and to assess the board's effectiveness is important to a nonprofit's success...More |
Chief Executive Assessment
Effective nonprofit leadership includes regular discussion of chief executive goals and expectations between the board of directors and the chief executive. Annual goal setting and year-end assessments against the goals establishes trust, understanding and identifies strengths and areas of opportunity in leadership development...More |
Compensation
A critical duty of a nonprofit's board is setting the annual compensation of the chief executive. To assure that compensation decisions are carefully considered and that pay is reasonable, the board or the committee to which it has delegated compensation decision authority has access to all relevant data and the deliberations are documented...More |
Monitoring Mission and Strategy
A nonprofit board is responsible for determining and monitoring the mission of the organization and the strategy that supports it. Regular reviews of the nonprofit's mission and strategy assure that resources are being utilized responsibly and that the strategy is consistent with accomplishing their mission...More |
Governing Document Review
The governing documents of a nonprofit formalize many of the policies, procedures and structures that demonstrate effective governance. A nonprofit's board should regularly review the organization's governing documents to assure their relevance and that the board's and the organization's governance practices are being followed...More |
Federal Tax Filing Review
To assure accuracy and transparency of a nonprofit's annual financial filing, the board of directors should regularly review filings and resolve any outstanding issues prior to filing with governmental authorities...More |
Whistleblower Policy
To demonstrate accountability to donors and constituents and to prevent abuse, nonprofits should adopt a policy and provide a means for reporting information on perceived or possible illegal practices or violations of organizational policies...More |
Document Retention Policy
Proper protection and destruction of important organizational documents is symbolic of a nonprofit's dedication to governance and accountability. A policy and related procedures outlining document retention practices provides assurance that information relating to audits, litigation and investigations is being properly maintained or destroyed in accordance with legal requirements...More |
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