The board must be confident in the policies and procedures they have formulated. This means having clear roles and responsibilities, being open about who’s in the room and encouraging active engagement. It’s also crucial to conduct a thorough performance evaluation of the board.
In the aftermath of scandals and controversies, many boards have taken on the challenge of strengthening financial reporting, overhaul their structures, and become more compliant. If they stop there but do not go further, they will miss an opportunity to transform their board into a true powerhouse of governance.
The success of a nonprofit organization is dependent on a board that has the proper structure, procedures and expertise. These aren’t easy to implement. This is especially applicable to small non-profit organizations that are having a difficult time managing their limited resources and time. By implementing best practices, a nonprofit board can be more well-informed and secure, more cooperative and driven.
Boards should, for instance make sure they are using the technology to reach their strategic objectives and give transparency. This boardmaps successful collaboration will allow them to recognize any risk that might be present and prioritize their risk management strategies.
Another good governance practice is to keep the shareholders on your side. This means identifying and responding to concerns of shareholders well before the proxy season.
Independence is the most fundamental principle of governance. It ensures that board members aren’t in a position of favoring their personal interests over the interests of the company. It also enhances objectivity and independence when making decisions and offers new perspectives for strategic decision-making.
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