GOOD GOVERNANCE

(for not for profits)

WHAT?

WHY?
HOW?

Warwick Prime International Federation of Kidney Foundations

GOOD GOVERNANCE
(for not for profits)

What is it? The concise Oxford Dictionary defines Governance as an act, manner, fact or function of governing, sway or control.

GOOD GOVERNANCE
(for not for profits)

Why?
Good Governance is as or more important for not for profit.
For Profits have * Accountability to shareholders * Are subject to takeovers * Have tax privileges * Do not distribute profits * Do not have owners

Not For Profits

Result?
Greater reliance for Good Governance on Board of Directors and CEO

GOOD GOVERNANCE
(for not for profits)

How?

Nineteen essential steps in the process of good and responsible governance

GOOD GOVERNANCE
(for not for profits)

Step 1

DEFINE SEPARATION OF ROLES The roles of the Board and the CEO/Executive Director are defined recorded and respected. The Boards focus is on policy and planning. The CEO is delegated as the Manager of the organizations operations. CEO RECRUITMENT AND INDUCTION The Board of Directors recruits employs and inducts the CEO and provides clearly written expectations and qualifications for the position as well as reasonable compensation. THE BOARD ACTS AS GOVERNANCE TRUSTEE In effect, this is on behalf of the community at large, stakeholders and contributors, whilst carrying out the organizations mission and goals. To fulfill this the Board must actively participate in the planning and mission preparation process.

Step 2

Step 3

GOOD GOVERNANCE
(for not for profits)

Step 4

NOMINATION PROCESS The nomination process for membership of the Board must ensure it is appropriately diverse with respect to gender, ethnicity, culture, economic status, skills and or expertise. BOARD TRAINING AND EVALUATION The Board members should receive regular training and information about their responsibilities and conducts a self evaluation at least once a year. BOARD ORIENTATION New Board members should be oriented to the NFP including vision, mission, Bylaws, policies and programs, as well as their roles and responsibilities.

Step 5

Step 6

GOOD GOVERNANCE
(for not for profits)
Step 7 DOCUMENT RESPONSIBILITIES The Boards organization should be documented with descriptions of the Board and Board Committees responsibilities. MANUAL A Board operations manual should be produced. DISCLOSURE If the organization has any related party transaction between Board members and their family, they should be disclosed to the Board of Directors, the tax authority and the auditor.

Step 8

Step 9

Step 10 BOARD SIZE The organization should have at least the minimum number of members on the Board of Directors as required by their Bylaws or State or Country statutes.

GOOD GOVERNANCE
(for not for profits)

Step 11 BYLAWS APPROVAL Bylaws or rules adopted by the Board must comply with local laws and have been reviewed by legal counsel. Step 12 INCLUSIONS IN BYLAWS a. How and when notices for Board meetings are made. b. How members are appointed/elected by the Board. c. What the terms of office are. d. How Board members are rotated. e. How ineffective members are removed from the Board. f. Number of members for a quorum.

GOOD GOVERNANCE
(for not for profits)

Step 13 BYLAWS REVIEW The Board of Directors must review the Bylaws. Step 14 URGENT BUSINESS The Board must have a process for handling urgent matters between meetings. Step 15 PAYMENT Board members serve without payment unless the organization has a policy of reimbursement of out of pocket expenses. Step 16 CONFLICT OF INTEREST The organization should maintain a conflict of interest policy and all Board members and executive staff sign off in compliance.

GOOD GOVERNANCE
(for not for profits)

Step 17 CALENDAR OF MEETINGS The Board should prepare a calendar of meetings, attendance policy and ensure a full meeting takes place at least once a quarter. Step 18 AGENDAS Meetings must have written Agendas and Minutes and materials relating to significant discussions are given to the Board in advance of the meeting. Step 19 CHAIR OF THE BOARD It is advisable that the Board has a written policy prohibiting employers and members of employers immediate families from serving as Board Chairs or Treasurers.

GOOD GOVERNANCE
(for not for profits)

Remember the integrity and success of your organization relies on Good Governance. Dont underrate it!
Recommended reading on Governance, Board self evaluation, corporate and social responsibility, management ethics and links to Management Assistance Programs

www.mapnp.nonprofitoffice.com www.lib.msu.edu/harris23/grants/znonprof.htm www.icgn.org/organisation/documents/blp/bylaws_agm2002.php

An IFKF Presentation by Warwick Prime