TAILIEUCHUNG - Directors of Not-for-profit Organizations Should Ask about Governance

The appraisal process can be uncomfortable, particularly in an informal culture where there are friendships between the individual and members of the board. The best approaches begin with establishing a clear understanding between the board and the employee of the requirements of the position and the basis on which performance will be evaluated. This can include: meeting measurable targets, conforming to the organization’s ethical standards, treating others with respect, and maintaining good community relationships. It may be appropriate to obtain input from employees and other stakeholders. Care must be taken to keep the appraisal process objective and free from personal. | 20 Questions Directors of Not-for-profit Organizations Should Ask about Governance Hugh Lindsay FCA CIP A _____________________ Chartered Accountants of Canada How to use this document Each 20 Questions publication is designed to be a concise easy-to-read introduction to an issue of importance to directors. The question format reflects the oversight role of directors which includes asking a lot of questions. For each question there is a brief explanatory background and some recommended practices. The questions except for those about salaried employees are intended to be relevant to all not-for-profit organizations. The answers or comments that accompany the questions summarize current thinking on the issues and practices of not-for-profit governance. If your organization has a different approach you are encouraged to test it by asking if it provides a valid answer to the question. After the comments there are personal checklists that directors can use to assess their understanding of their organization and to prompt further questions if they are not fully satisfied with the answers. They represent aspirations not absolute standards that must be met immediately. It will often take time to get there. The fact that an organization does not have good answers to all the questions need not stop a prospective director from joining its board. Not-for-profit organizations frequently need directors who can contribute experience and expertise to the board. It is however important that the organization recognizes any weaknesses and demonstrates a commitment to continuously improve its governance. If you come from a for-profit business you will find that your experience although often helpful will not always provide the best answers in the not-for-profit environment. The material in this document should help you decide what might be appropriate. Appendix 3 compares and contrasts corporate and not-for-profit governance. Readers who want more details on specific topics may refer

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