Board Accountability

One of the journal articles assigned to our class was Placing the Normative Logics of Accountability in “Thick” Perspective by Alnoor Ebrahim, as published by the American Behavioral Scientist. In it there is a table that breaks board responsibilities regarding accountability into three areas:  governance, performance, and mission. When talking about board accountability, the conversation often surrounds board fiduciary responsibilities and internal controls for financial management. According to Ebrahim, establishing internal controls and financial oversight falls under the board's "governance" role.

Even though we would like to think fraud is not be a common problem among nonprofit organizations, unfortunately they are ripe for it. Part of this is due to increased trust among nonprofit boards and staff, and that laws such as Sarbanes-Oxley do not place the same restrictions and requirements on nonprofit organizations. This video by a nonprofit consulting group speaks to the issue of fraud in nonprofit organizations (minus the part at the very end where he talks about his kids listening to Cyrus and Bieber):

Board Pay

You may have read the news this month that Massachusetts lawmakers are in the process of possibly putting limits on pay for nonprofit board members. This could mean big changes for how some larger nonprofits - particularly those in the health and education sectors - operate. It is no surprise that students and professionals of nonprofit organizations have been monitoring the issue closely.

From The Chronicle of Philanthropy State Watch blog:

The measure arose from a proposal backed by Martha Coakley, the Massachusetts attorney general, that followed a public outcry over five-figure stipends for directors of the state’s four nonprofit health insurers, two of which voluntarily suspended board compensation.

The proposal is not attempting to do away with all nonprofit board pay, but the limits on pay will affecting a wider scope of organizations than just those paying individual board members five figure salaries. As an alternative, organizations will be able to apply for exemptions to the pay limits with the state attorney general, but the proposal is still causing a great deal of concern among organizations that may be affected. As described in the posting, some agencies are concerned over maintaining board diversity, socio-economic representation, and engagement if there are limits on pay: