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Risky governance questions and policies

Managers like to have a free hand to do things the right way, but every organization needs some kind of structure or guiding principles. For most, that means some kind of governance.

Melanie Lockwood Herman, executive director of the Nonprofit Risk Management Center, wrote that lack of practical governance policies is one of the Top 10 risks faced by nonprofit organizations. Herman said that many nonprofits run serious risks by not having governance policies that cover the following: Conflict of interest; CEO compensation; Personnel policies; Code of conduct or code of ethics; Board compensation/reimbursement; Travel expenditure; Financial management; Whistleblower protection; Document destruction and retention; and, Fundraising and gift acceptance.

Herman said that when it comes to issues of governance managers should keep a few things in mind:

  • Ask questions such as: What’s the purpose? What does it mean? How does it work? What is my responsibility?
  • Always listen to the small voice saying to speak up.
  • Keep in mind that it’s OK to change an answer.
  • Have the courage to ask tough questions, rather than boasting about having all the answers.

As we celebrate our 36th year, NPT remains dedicated to supplying breaking news, in-depth reporting, and special issue coverage to help nonprofit executives run their organizations more effectively.