Tuesday, July 12, 2011

Myths about Nonprofit Boards

Published in the “Blue Avocado newsletter,” are 10 myths about nonprofit Boards from Board Café. Here are a couple of them.

Myth#1: Nonprofits have to comply with Sarbanes-Oxley
In the wake of the Enron and other corporate scandals, this federal act of 2002 was designed to improve accuracy of disclosures by publicly held companies. Provisions include certification of financial reports by the CEO and CFO, having non-staff on the board's Audit Committee, prohibition of personal loans to executives, and so forth.

Reality: Only two SOX provisions apply to nonprofits:
• Stronger whistleblower protections
• Longer retention of certain legal records

Read more in Blue Avocado: Sarbanes-Oxley and Nonprofits.
Myth #2: The best size for a board is 16.

Reality: Well, that's the average size. (Do you want to be average?) There isn't a "best" size for a board. Research shows that small boards think they should be bigger and big boards think they should be smaller.

Size depends on:
• What the organization needs the board to do at this time in its history
• How many people the executive director and the staff can support
• The size of the room at your organization where the board meets (really!)

Posted by Kathy Grochow, NRS, St. Cloud

No comments: