Every fiscal year, it is important for your Board to address the upcoming annual budget and financial reporting. It is also critical to review current board best practices. This includes reviewing strategic goals, updating bylaws, and revising conflict of interest policies, to name a few.
It is vital that these steps are taken every year to ensure that each annual audit comes through with flying colors. Not only does this prevent legal challenges for your organization, it also assists you with having a stronger appeal to foundations considering your organization for grant funding.
These policies and procedures ensure that your organization is operating transparently, with accountability, ethically, and meeting all legal and accounting expectations. The board of directors is the governing body of the nonprofit organization and they set the standards for the entire organization, including regular review of policies and procedures.
It should be considered mandatory hygiene for nonprofits to embrace ethical and accountable management and governance in all their efforts. An effective best practices plan ensures the organization assesses their own operations, governance, and management against external industry sets of best practice standards. A helpful standard can be found at the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector. This excellent resource provides educational resources, tools, and an accreditation program recognized at state level associations of nonprofits nationally.
What to Review
- Ensure current bylaws no longer mention abolished committees or positions.
- Ensure your contact information is accurate, including communication procedures.
- Ensure your organization’s bylaw clauses accurately represent your organization’s current reality and future planning. This may include ensuring that old practices may need to be re-implemented to ensure your organization remains “on mission.”
Board position review: member and officer descriptions
- Ensure the roles and responsibilities accurately describe what is required for each role to successfully support the organization’s mission.
- Ensure roles and responsibilities align with your organization’s governing documents.
- Ensure expectations assist with board recruitment, selection, and orientation. Provide role expectations prior to nomination acceptance.
Update annual conflict of interest statements
- A board-approved conflict of interest statement needs to apply to all parties: board members, staff, and volunteers.
- Ensure the conflict of interest policy states specific conduct which results in undeniable conflict of interest. Set forth disclosure procedures to address potential conflicts and a review process for individual transactions by board members who are un-involved.
Board performance review
- Board assessment is a required annual board hygiene step that guides the most effective use of members relating to their individual talents and experiences. Use this review to identify gaps in talent and experience that a new incoming board member will need to fulfill.
- Ensure board members are performing according to their responsibilities: fiduciary, governance, attendance, fundraising, as well as promised commitments.
- Ensure board members complete a self-assessment of their service as well as an assessment of the entire board of directors.
Nonprofit health and success requires an annual check-up of the board of directors and all governing policies and procedures. Without this, improvement stalls and nonprofit functionality can fall outside of its own bylaws. These are red flags to any foundation considering funding your organization. They like to see a well run ship and they want to see accountability matters to everyone in your organization. Schedule your check-up and prepare for this essential evaluation far in advance of the appointed time to ensure a well considered review is prepared and outcomes can be effective and efficient.