Some things don’t change: Not-for-profits have missions to fulfill, and their boards are responsible for overseeing mission fulfillment. Some things do change: Board governance must be focused more than ever on strategic direction, ethics and outcomes.See more in our State of not-for-profit industry 2014: http://gt-us.co/StateofNFP2014

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For the sake of an organization’s long-term ability to achieve its
mission, board members must meet expectations of competency
and transparency to ensure a strong organizational reputation
built on sound governance and the ability to execute.
Board involvement begins with information and connectedness
To effectively provide oversight and thought leadership to
executives and senior administrators, board members must
be both well-informed and willing to engage in constructive
criticism, to ask “the tough questions.”
Board members need to be assertive in learning about the
technological and service delivery changes reshaping the
not-for-profit industry. They must have access to needed
information and not fall prey to the intermittent nature of
board work. Board engagement isn’t effective when carried out
in quarterly increments of presentations and board reports. It
occurs when there is a connectedness to the organization through
ongoing communication and work. This means the board’s work
and reporting has to overcome the conventional tendency toward
committee silos of knowledge and action; real communication
must be established among the entire board and between the
board and the management team.
One tool that high-performing boards use to achieve these goals
is a board portal that provides important real-time organizational
documents, industry reports, news articles and committee work
products, along with a forum for questions and comments.
Mary Foster, Managing Director, Not-for-Profit and Higher Education Practices
Some things don’t change: Not-for-profits have missions to fulfill,
and their boards are responsible for overseeing mission fulfillment.
Some things do change: Board governance must be focused more
than ever on strategic direction, ethics and outcomes.
The recent recession — which wreaked as much havoc on the
not-for-profit sector as on the rest of the U.S. economy — as
well as federal sequestration and reduced state budgets have
created great challenges. With financial and competitive pressures
heightened, greater transparency is required.
In addition to outside challenges, a succession of not-for-profit
scandals and fraud has captured public and regulatory attention.
Organizational actions — ranging from raising funds, setting
compensation, communicating mission goals and measuring
outcomes to structuring third-party arrangements and reporting
results— are under scrutiny. Trust has been seriously eroded.
New complexities mean boards must innovate

2. New complexities mean boards must innovate
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Identify issues and risks, and keep them in check
It’s not always easy to recognize when an issue has the potential
to become a significant matter. One purpose of increased
knowledge and communication is building the board’s ability
to identify risks as they arise and to work with leadership to
respond. Keeping risks, as well as strategies and priorities, in
perspective leads to a focused, responsive and collaborative
governance process. Reputation and effective execution depend
on it. For further guidance, see www.grantthornton.com/
nfp-reputation for the article, “Safeguarding your nonprofit’s
reputation and ethical culture.”
Change might include governance structure
As boards evaluate and respond to governance questions, they
might determine that it is time to look at the organization’s
governance structure and to realign board committees and
responsibilities so they are focused on the core mission and
risks. Concentrating solely on operations is not useful in
today’s environment.
In its oversight role, the board must make sure that policies and practices are in place to ensure that day-to-day activities do not
compromise the organization’s reputation or its ability to achieve its mission. Ensuring an ethical environment that discourages inappropriate
behavior and seeks accountability of management to perform at a high level of excellence is one of the most important things a board can
do to contribute to long-term organizational success.
GOVERNING EFFECTIVELY: 6 ESSENTIAL QUESTIONS TO ASK LEADERSHIP
1. Risk identification and management program — If your organization has not yet embarked on a formal enterprise risk
management process, what is management doing to monitor the high-level strategic, operational, financial, technological, personnel and
compliance risks that can impede the organization’s success, and erode marketplace trust and reputation?
2. Ethics — Has your organization defined and implemented ethics policies so that a culture of appropriate behavior is embedded in
administrative, governance and programmatic policies and practices?
3. Conflicts of interest — Is there sufficient organization- and boardwide awareness of emerging best practices in the areas of
identifying, vetting and managing conflicts of interest?
4. Long-term market position and vision — Has management articulated the threats and opportunities confronting the organization
over the next three to five years relative to market standing, market niche and financial resources?
5. Internal operating effectiveness — Has management identified internal strengths that can be leveraged and weaknesses that should
be remediated to enhance operational effectiveness?
6. Integrated financial plan and dashboard — Has your organization developed a strategic multiyear financial plan that integrates key
financial trends and results with strategic initiatives? Such a dashboard report should provide an organization-based view of operations,
endowment, capital investment, mission success, and other key financial and nonfinancial drivers.
The critical work of board committees should be structured around
financial and human resource stewardship, program achievement
and outcomes, ethics and board development, and strategic
directions and options. While focusing on fundraising, investments,
audit and compliance is important, the more comprehensively that
a board views its role and committee work is structured, the more
synergy will increase and issues will be identified.
Committee-led discussions at board meetings should similarly
take on strategic questions and issues, and not be bogged down
with standard “reporting out” of committee work.
The result will be a greater contribution by the board to the goals,
achievements and outcomes of the not-for-profit.