Essay On Governance

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Varied Positions and Courses of Action To start, there are varied positions on the main functions a board is meant to perform. A more outdated concept classifies boards as merely an oversight entity. However, as policy and law-makers and regulators demand higher board involvement and accountability, boards are pushed into performing more active roles, including, “policy setting and review, employee supervision, and overall management of the organization” (Hopkins et al., 2015, p. 58). To meet these rising expectations in governance, nonprofit boards are forced to change and implement new processes that promote good governance practices. The composition of a nonprofit’s board of directors or board of trustees provides the opportunity…show more content…
Such policies include: “conflicts-of-interest policy, whistleblower policy, document retention and destruction policy, code of ethics, investment policy, travel and reimbursement policy, and fundraising policy” (Hopkins et al., 2015, p. 60). Although these policies are typically not legally required, in the event of an audit or investigation, they illustrate an effective and prepared governance infrastructure. Recommendations for the Future Internal Governance Standards. Going beyond what is legally required of a nonprofit’s governing board, nonprofits should set their own governance policies in order to identify standards that will help them be the best version of themself. Nonprofits can include corporate policies such as the conflicts-of-interest policy. As previously stated, such corporate policies are not required by law, but they do aid in maintaining the “duty of loyalty.” Additionally, boards can use their own internal governing standards to set mechanisms in place to prevent any of the legal requirements of the nonprofit sector from going overlooked. For example, boards can schedule routine times in which they review their joint ventures and subsidiaries, as well as the requirements of their tax-exempt status to ensure that these demands are met; thus, simultaneously maintaining a board’s “duty of obedience.” Careful Board Selection. Good governance starts with a good governing board. Because few legal requirements exist surrounding

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