Enhancing Nonprofit Governance Through Better Information Flow to Directors

Abstract

To counteract the ability of a nonprofit’s chief executive officer to control information reaching the board of directors, we recommend that a nonprofit board consider requiring leaders of the organization’s various functions to provide operational reports directly to the board on at least an annual basis. Additionally, we recommend that a board discuss these reports directly with management members, preferably without the participation of the CEO. Implementing such a protocol should strengthen the board’s ability to make decisions based on information from sources in addition to that of the CEO, improve the directors’ ability to independently evaluate members of the management team, and increase the directors’ understanding of the nonprofit’s activities and performance.