Good read for all nonprofit board of directors, leadership, management. Governance today requires better and bigger responsibilities. . Not the least of these is the same as for profit groups, namely compensation of executive staff.
Excerpt: Committees of the board of directors or trustees of various not-for-profit entities are being asked to assume increasing responsibility and be proactively engaged in the leadership and success of the organization. Accompanying these expectations are new requirements and pressures from regulators, funding agencies, donors, beneficiaries, employees and other stakeholders that require board members or trustees to implement programs and structures that can effectively respond to and administer a decision-making process consistent with their fiduciary responsibilities of loyalty, honesty and care. The governance committee plays a critical role in deepening the understanding of the full board about appropriate processes that can assist in its critical role as a fiduciary. In relation to compensation decision-making, the governance committee can assist the compensation or human resources committee by helping identify potential new committee and board members who are well-versed in the expectations set by regulators and governing agencies, such as the Intermediate Sanctions Regulations, Stark Law requirements in health care, presidential housing valuation requirements for higher education and many more compensation- and benefits-oriented issues. In addition, the governance committee should understand the best practices for general governance protocols and other committees within its own not-for-profit community (e.g., higher education, health care, social services, religious). The committee should also be willing to adopt successful tactics from the for-profit community. A successful not-for-profit organization will have transparent internal communication processes and practices, policies and programs that can evolve along with the organization. •