Also to giving standards for independence, SOX consists of some other provisions that board members may perhaps possibly pick out to take into consideration possessing their organizations adopt since the “gold standard” of nonprofit governance.
Holding meetings devoid of management gaining present
Just just after SOX, further boards began holding meetings outside of the earshot of management. These boards took this move for the purpose that excluding the prime dogs from meetings enables the boards to further conveniently evaluate the effectiveness and independence of management.
Forming committees for nominating directors
Numerous organizations are adopting distinct procedures for recruiting and nominating qualified directors, and they’re also publicly disclosing these policies.
Forming compensation committees
With just about every one particular of your compensation scandals in every single the profit and nonprofit sectors, numerous boards are adopting compensation committees made up of independent members. These committees allow to closely study the circumstance and make well considered recommendations.
Establishing independent audit committees
In spite of the truth that it may perhaps possibly be impractical to form an absolutely independent board of directors, the board members that sit on the audit committee should really definitely be independent. Audit committees care for the outside accountants and auditors, and they address troubles relating for the accuracy of the organization’s financial statement.
Making governance recommendations public
Equivalent for the SOX requires of for-profit providers, numerous nonprofit organizations are opting to post their corporate governance recommendations on their Net net pages. The following is usually a checklist of troubles that your board may perhaps possibly pick out to address in constructing its private recommendations for governing the organization:
- Director qualification standards, like procedures for education an continuing education
- Responsibilities of directors, like obligations to attend meetings
- Policies for director access to management and independent advisors
- Procedures for determining director compensation
- Management succession policies
- A procedure for the board to conduct an annual self-evaluation
