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Considerations for Good Non Profit Leadership.
While not an exhaustive description,
these are generally accepted practices for good stewardship of a non
profit organization. Today more than ever, governance of non profit
corporations is under greater scrutiny and directors and officers of
these corporations should be concerned with liability issues. All
non profit organizations should:
- Practice Sound Management
- Develop comprehensive by-laws
- Make conflict-free business
decisions
- Consider legal standards and
industry practices
- Create a culture of integrity at
all levels
- Establish codes of business
conduct
- Institute compliance programs
Role and Responsibility of
Senior Management
Senior managers are responsible for
the daily operation of a non profit organization.
The Chief Administrative Officer, the
most senior paid professional, is ultimately responsible to the
Board of Directors for operations of the organization. Senior
managers are responsible for:
- Effective and ethical operations
- Business and budget planning
- Risk management
- Financial reporting
- Public relations
Role and Responsibility of Non Profit
Board Members
Board members should not become
involved in daily operation of a non profit but rather should
develop the standards of organizational behavior by which operations
will be conducted by senior management and others.
- Select and evaluate a Chief
Executive Officer
- Oversee the CEO and other senior
management
- Participate in strategic planning
- Review financial statements
- Approve contracts and policy
- Plan for succession including the
board and senior management
A board of directors of a non profit
corporation has a duty of care, a duty of loyalty and a duty of
obedience to the organization. State laws vary and but each state
specifies what it considers an acceptable level of behavior in
determining if board members are acting in the best interest of the
non profit organization.
A Duty of Care generally
includes the discharge of duties in good faith utilizing a degree of
diligence, care and skill a person of prudence would exercise under
similar circumstances.
A Duty of Loyalty generally
includes an allegiance to the organization, a level of
confidentiality, a responsibility not to use position for personal
gain, and an obligation to act in the best interest of the
organization at all times.
A Duty of Obedience includes
establishing the mission of the organization and remaining loyal to
it, following the articles of incorporation and by-laws, and
assuring the organization's compliance with law.
Every non profit organization must
take steps to practice sound management and assure that the mission
of the organization continues to advance. Be certain to obtain legal
counsel to review your practices.
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