Although this article may focus on for-profit boards, there is a great deal in it for nonprofits to ponder. It again shows that although the mission vision and values differ between the two types of boards, operationally there is much that can be learned from each other
Nonprofit CEO-Board Relationships
A 2012 Agenda for Nonprofit Audit Committees
A 2012 Agenda for Nonprofit Audit Committees
By: Eugene Fram
Nonprofit audit committee members might want to view a video presentation at the Corporate Board Member Website (June 9th) for a list of top issues being faced by for-profit audit committees. Catherine Bromillow, PwC Center for Board Governance, presents the list.
Following, in her order of importance (high to low), are those that I feel can apply to nonprofit organizations.
RISK MANAGEMENT – Focusing on the known risks and estimating the unknown ones. For example, how will the greater use of psychiatric drugs impact nonprofit counseling organizations?
INCREASED USE BY REGULATORS – What use will the IRS make of the governance information now being collected annually via the expanded 990 Forms? Do volunteer directors know the potential impact of the Intermediate Sanctions Act?
CHANGES IN REGULATIONS & ACCOUNTING STANDARDS – What impact, if any, will Dodd-Frank have on nonprofits? (Although not directed to nonprofits, Sarbanes-Oxley has had some indirect impacts.) What changes in accounting standards need to be reviewed by a nonprofit audit committee?
TURBULENT ECONOMIC CONDITIONS – What plans are in place to survive more turbulence in the world economy?
INTERNAL CONTROL STRUCTURE – How does the internal control structure need to be changed after a merger or acquisition transaction between two nonprofits?
TAX COMPLEXITY- How do changes in state or federal tax regulations impact a nonprofit organization’s business plan?
OPERATION COMPLEXITY – For those nonprofits that operate from multiple sites, the audit committee needs to understand key issues for each site. Visits to all sites by the committee or individual directors are important.
COMMITTEE EFFECTIVENESS – With frequent rotating membership, how do nonprofit audit committees go about improving their operations?
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What’s required to develop a positive nonprofit board culture?
What’s required to develop a positive nonprofit board culture?
- In order to maintain trust between the board chair and the CEO, the board chair must be certain that the evaluation of the organization and the personal evaluation of the CEO are inclusive, i.e., cover a balance of the most relevant outcomes.
- The interpersonal chemistry between the board chair and the CEO must be a positive one. If the interpersonal chemistry is poor, civil discourse at meetings is hard to maintain.
- The CEO needs to be flexible. He or she needs to accommodate to a new boss every year or two and can’t become complacent. The CEO needs to be alert to the fact the board, often initialed by a new chair, may want to move in a new direction.
Directors & CEO Alert: Never underestimate the power of the established board culture as a barrier when attempting to make changes. However in some instances culture can be an asset in change management.
Source: “Policy vs. Paper Clips” Third Edition, 2011, pp. 156-157.
Nonprofit & Trustee Director’s Alert! Watch your organization’s reputation.
Nonprofit & Trustee Directors Alert! Watch your organization’s reputation.
In contrast to business firms, nonprofit and trustee boards can be against a brick wall when the reputations of their organizations go south. In the commercial environment, (more…)
What can a nonprofit board of directors do about “displaced directors”?
What can a nonprofit board of directors do about “displaced directors”?
Displaced directors are board members who can’t adapt to a more modern board model or a new CEO and management group. Traditionally, they want to be involved in operations, a few, at the extreme, want to micromanage the CEO.
Obviously, some of these people will resign, but what can a CEO or board chair do (more…)
Crisis Management – What is the proper role for a nonprofit’s board of directors?
Crisis Management – What is the proper role for a nonprofit’s board of directors?
Changes buffeting nonprofit boards of directors are increasing substantially. At the top are the widespread budget cuts from foundations and governmental organizations, along with many individual donors reducing their traditional gifts. In addition, a sudden social change, reputation decline, or a fire/flood are events, which may change a board’s engagement style with management, staff and other stakeholders.
A board’s style in such situations will depend on its seriousness. (more…)
Nonprofit CEO Board Chair Relationships – Anything Works
Nonprofit CEO Board Chair Relationships –Anything Works!!
A recent NPQ Nonprofit Newswire (March 13th 2012), report concludes, that to build good nonprofit CEO-board chair relationships, “Task lists and job descriptions often propose a “one size fits all” recipe for the CEO-Board chair relationship, (but the lists have little to do with real world effectiveness.)” (more…)
Once Again! Should a Nonprofit CEO Be a Voting Member of the Board of Directors?
Once Again! Should a Nonprofit CEO Be a Voting Member of the Board of Directors?
I was surprised to read in a Board Source nonprofit report that this board of directors’ question is one of the most frequently asked. From a Google search, I was also surprised to find that, outside of a few vague references that there may be legal issues involved with the decision, (more…)
Nonprofit board term limits – How long should directors serve?
Nonprofit board term limits – How long should directors serve?
By Eugene Fram
I am currently a director of a five person condo board responsible for reserve and operating assets of well over $1million and capital assets probably worth over $25 million. When the condo group was formed over 15 years ago, the bylaws stipulated that each director can only serve for one two year term, but couldn’t be reelected until after a period of one year off the board.
The logic of this arrangement was that every year either two or three new board members must be replaced. (more…)
TO WHOM SHOULD ADVISORY BOARDS PROVIDE SERVICE?
To Whom Should Advisory Boards Provide Service?
By: Eugene Fram
I have established or served on a number of nonprofit advisory boards. Based on these experiences, I suggest that board members, along with the CEO (more…)
Nonprofit Management 