The board of directors must to be reassured that the procedures and policies they’ve formulated are working. This includes having clear roles and responsibilities, a clear understanding about who’s in the room and encouraging active involvement. It is also important to have a robust performance evaluation of the board.
Many boards have been compelled to revise their structures, improve their financial reporting, and be more compliant after scandals. If they don’t, however, they will have missed the chance to transform their board into true governance powerhouses.
The success of a non-profit organization depends on a board that has the right structures, procedures and abilities. These aren’t easy to do. This is especially relevant for small non-profit organisations, which are struggling to manage their limited resources and time. By adopting best practices boards of non-profit organizations can become more informed, secure and collaborative, as well, and driven.
For instance, boards should ensure that they are leveraging technology to help them reach their goals for strategic development, and also to ensure transparency. This will allow them to recognize the risk they could face and prioritize their risk management efforts.
Another governance best practice is to keep shareholders on side. This means identifying and responding to concerns of shareholders well before proxy season.
The independence principle is also an important principle of governance. It ensures board members don’t have the chance to put their personal preferences over the interests of the company. It also enhances objectivity as well as impartiality when making decisions, and provides new perspectives for strategic decision-making.
