How Seriously Does Your Nonprofit Board Take the Matter of Ethics?
By Eugene Fram Free Digital Photo
Most board members are aware of their obligation to ensure their nonprofit’s compliance with certain standard regulations e.g. making tax payments, submitting IRS Form 990s and/or avoiding potential fraud. But what I have found missing in the nonprofit environment is a sense of board member responsibility to provide for and sustain a viable ethics program. (more…)
A Nonprofit Board Must Focus On Its Organization’s Impacts
By: Eugene Fram
“One of the key functions of a (nonprofit) board of directors is to oversee (not micromanage) the CEO, ensuring that (stakeholders) are getting the most from their investments.” * State and Federal compliance regulations have been developed to make certain that boards have an obligation to represent stakeholders. These include the community, donors, foundations and clients, but not the staff as some nonprofit boards have come to believe. The failure of nonprofit boards, as reported almost daily by one blog site, ** shows something is wrong. Following are some inherent problems. (more…)
Director Independence: a Nonprofit Board Issue?
By: Eugene Fram Free Digital Photo
In the best of all nonprofit worlds, every director is an independent agent whose ability to make critical decisions on behalf of the organization is regularly uncompromised by outside pressures. This, unfortunately, is not always the case. Based on field observation I have concluded that questionable practices can plague nonprofit boards when social or political pressures are brought to bear on a director. In governance terms nonprofit decision-makers should be “outside directors,” not overtly or covertly susceptible to management or board colleague personal pressures.
Discerning recruitment committees can screen candidates to be certain they are not subject to influences that might impair their judgment as board members. Lack of independence could easily divide and perhaps polarize the board as has happened in our country’s Congress. A candidate who is “sponsored” by a major donor and maintains personal ties with the donor can create a “hornet’s nest” for the recruitment group. There are no easy solutions to these problems. (more…)
A Special Relationship: Nurturing the CEO-Board Chair Bond
By Eugene Fram Free Digital Photo
Viewer Favorite – Updated & Revised
Here are tips to assure the best possible partnership between the board chair and CEO.
Keeping boards focused on strategic issues is a major challenge for nonprofit leaders. This leadership crisis is intensified by the fact that board chairs tend to have short terms (according to BoardSource, 83% stay in office only one or two years). Thus, nonprofit CEOs and board chairs need to bond quickly. For the good of the organization, they must come together swiftly and create a partnership that works. Here are golden rules for the CEO and board chair to follow: (more…)
Can Nonprofit Management Usurp Board Responsibilities?
By Eugene H. Fram
On balance management will always have more information about the organization than volunteer board members. As a result, directors must be proactive in seeking information from management and a variety of other sources, even if they must involve employees other than senior management. Following are three field examples showing what has happened when boards failed to be proactive (more…)
Maintaining World Class Integrity in a Nonprofit Boardroom: Guides for Action
By: Eugene Fram
There is little question that boards have overall responsibility for ensuring a nonprofit’s integrity. Take, for example, the case of a nonprofit where the former executive director and a board member conspired to steal $4 million of the organization’s funds. While the board did operate within its fiduciary duties and had no personal liabilities, an attorney in the case reported: This does not prevent a state’s attorney from laying blame on the board, however. Although there may be no personal financial loss, the board its individual directors and the organization can suffer significant repetitional loss when integrity issues arise. http://bit.ly/REmSoC (more…)
