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Nonprofit News

Five Ways to Improve Board Governance and Organization

2/22/2017

Charitable leaders have a great opportunity in 2017 to improve board governance practices and strengthen their organization’s ability to respond to needs within the community.

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1. Ensure compliance with bylaws. All board members should review the bylaws and originating documents of the organization. Board members must ensure that the organization is in compliance with the procedures and activities highlighted in those documents. If any provisions in the bylaws don’t make sense anymore, they need to be amended.
2. Annually update conflict-of-interest disclosure forms. Ensuring that board members and key staff annually update disclosure forms according to a conflict-of-interest policy will help the board monitor and review issues that may constitute potential conflicts.
3. Develop an annual planning calendar. Planning calendars help board members ensure that important tasks don’t fall through the cracks and help promote continuity of operations when there are leadership changes. Events or projects included in the bylaws, such as annual meetings and reports, should be included in the calendar. Plans for preparing IRS 990 filings and Ohio Attorney General filings for board review and approval also should be included. A note should be placed on the calendar each year to check if the continued existence filing with the Ohio Secretary of State’s office is due. Budget planning and review activities should be calendared, as should special fundraising events and annual activities. Other operational and public events can be added as appropriate.
4. Examine fiscal and budget policies and procedures. One of the top responsibilities of board members is to ensure that there are appropriate policies and procedures in place to protect assets that have been entrusted to the board. The board should review whether there are adequate internal controls in place, whether controls are being followed, and whether there are separations of duties to help protect funds by ensuring multiple people are involved with the organization’s finances. For example, the board should ask: How are revenues and expenses tracked and reported to the board? Are new processes needed to address budgeting and financial reports to the board?
5. Evaluate how the board is performing and whether it is being responsive to the needs of the organization. Great boards evaluate their own performance and determine if changes are needed. Does each board member actively participate? Do all members understand the policies and operations of the organization? Is the board meeting its legal obligations for overseeing the charitable organization? Should there be more meetings or committees? Are new board members needed to bring different perspectives to the table?

Many charitable boards already have these measures (and more) in place. But board governance must be continually monitored and refined, even by the most sophisticated organizations.
 
Sometimes organizations may find it most manageable to set annual goals for the board that include a review of policies in a specific area. For example, the first year might focus on policies affecting financial matters, and the next year might include a review of fundraising policies.
 
The Ohio Attorney General’s Charitable Law Section offers monthly webinars about board governance at noon on the first Wednesday of each month. Registration details, as well as a recorded version of the webinar and other resource materials, can be found at http://www.ohioattorneygeneral.gov/Business-and-Non-Profits/Charity/Resources-for-Nonprofit-Board-Members.aspx