Nonprofit Organizations Case Study

SAGES: Exploring Nonprofit Organizations
Worksheet on Board Governance Total_______/100

Name: Michal Jastrzebski

Based on your readings, on Blackboard, on board governance, please answer these questions in complete sentences.

1. Why is being a board member a serious responsibility? Give at least two reasons, explaining them in complete sentences. [10 points per reason; 20 points total]

Being a board member is a serious responsibility because these people have to safeguard the organization and its resources so that only mission related initiatives are realized. By serving on behalf of the community, board members also have to make decisions that help the organization prosper. They do this by providing guidance and oversight on different
objectives.

2. Explain in your own words what is meant by “duty of care.” Write at least two complete sentences. [10 points]

Duty of care is a fiduciary obligation that describes how actively involved a board member is with the organization. Board members have to show a high level of initiative. They especially need to be up-to-date on recent reports or policies, so that they are capable of reasoning and making sound decisions.

3.
Indicate at least one of the “Principles for Good Governance and Ethical Practice” that is part of the “duty of care.” Summarize the principle, indicating its number, and explain in your own words why you selected this principle. Write at least two complete sentences [10 points].

Principle 15 of “Principles for Good Governance and Ethical Practice” is a good example of “duty of care.” In summary, this principle says that board members have to implement as system that can allow for easy communication and transfer of knowledge. This is important because board members have to be well informed about all programs, and responsibilities so that they can effectively carryout their oversight duties.

4. Explain in your own words what is meant by “duty of loyalty.” Write at least two complete sentences. [10 points]
Duty of loyalty refers to the idea that board members should put the interests of their organization before their personal interests. When a conflict of interest emerges, board members should disclose their predicament and abstain from any interest related decision making. Board members have to be loyal to the organization even if they will be negatively affected by a
decision.

5. Indicate at least one of the “Principles for Good Governance and Ethical Practice” that is part of the “duty of loyalty.” Summarize the principle, indicating its number, and explain in your own words why you selected this principle. Write at least two complete sentences [10 points].

Principle 3 is part of the “duty of loyalty.” In summary, it says that organizations should have a set of policies and procedures implemented for dealing with conflict-of-interest situations.
This way their wont be any surprises later on when conflict-of-interest issues arise. Board members will be better equipped to make the right decision that favors the organization

6. Explain in your own words what is meant by “duty of compliance.” Write at least two complete sentences. [10 points]

Duty of compliance is a fiduciary obligation that involves adhering to the organizations’ governing documents, reporting requirements, as well as, state and federal regulations. In essence, board members have to follow and respect all governing rules and regulations so that the organization succeeds in fulfilling its mission statement.

7. Indicate at least one of the “Principles for Good Governance and Ethical Practice” that is part of the “duty of compliance.” Summarize the principle, indicating its number, and explain in your own words why you selected this principle. Write at least two complete sentences [10
points].

Principle 1 is part of the “duty of compliance” because it stresses the importance of falling laws and regulations. Organizations have to abide by federal, state, local, and international regulations before they can offer any services or programs to communities. This is important because failing to comply could potentially jeopardize the entire organization.

8. Explain in your own words what is meant by “duty to manage accounts.” Write at least two complete sentences. [10 points]

Duty to manage is the board members responsibility of making sure the organization remains financially stable well into the foreseeable future. This involves annual budgeting and monitoring of expenses on things like programs and salaries. A key component of this is fiduciary responsibility is creating internal controls that spread control of finances to many different people in the organization. This is important because it allows individuals to check each others work for possible fraud.

9. Indicate at least one of the “Principles for Good Governance and Ethical Practice” that is part of the “duty to manage accounts.” Summarize the principle, indicating its number, and explain in your own words why you selected this principle. Write at least two complete sentences [10 points].

Principle 21 is part of the “duty to manage accounts.” In summary, this principle says that financial records must be accurate and up-to-date. Furthermore, it says the board and an independent financial auditor should review annual statements. Accuracy becomes very important when board members have to make budgeting decisions that influence the organizations objectives.