Not-for-profit governance requires that every organization utilize a board of directors. Initially, boards simplistically adopt rudimentary procedures, such as Robert’s Rules of Order and an agenda template. They consider issues and make decisions, based upon situations that present themselves or based upon what management presents to the board for consideration. Therefore, many boards operate in a reactive, rather than a proactive manner.
There are many reasons why a board will obtain meeting facilitation assistance. These may include Chairman’s Level Playing Field Participation, Chairman’s Absence, Special or Crises Situation, Sensitive Issues, and more.
An organization’s mission lies at the core of its reason for being. A clear, forceful and compelling mission statement identifies an organization by its purpose. Clearly articulated mission represents every organization’s keystone to purpose, identity, and image.
Not-for-profit business, like for-profit enterprise, involves strategic purpose and method. Rarely does any organization thrive, much less survive, by aimlessly diving into activities intended to change the world. All businesses require planning. Furthermore, all businesses need capital to operate. The development of sound financial planning is essential to the success and flourishing of every organization.
In the context of history repeating itself with scandals, internal control has been established as a fundamental responsibility of every organization’s board of directors. Although it may be delegated to management or others, ultimate responsibility attaches to every board.
With the advent of Sarbanes-Oxley legislation in the aftermath of Enron and other financial scandals, the chairman of the Senate Finance Committee, Senator Charles Grassley, and the ranking member, Senator Max Baucus, sent a letter to INDEPENDENT SECTOR encouraging it to assemble an independent group of leaders from the charitable sector to consider and recommend actions to strengthen governance, ethical conduct, and accountability within public charities and private foundations. Consequently, the INDEPENDENT SECTOR created the Panel on the Nonprofit Sector with 24 distinguished leaders from public charities and private foundations from around the United States.
Observation indicates that most not-for-profit organizations’ finance committees have little idea what they should be doing, beyond certain traditional functions such as reviewing financial statements, the budget, and sometimes investments. But without specific objectives and direction, the usefulness of finance committees to the boards they serve will remain limited.