GOVERNANCE

Compiled from Nonprofit Good Practice Guide
Johnson Center at Grand Valley State University

Governance plays the central role in setting policy and providing oversight in a nonprofit organization. As nonprofits continue to grow in both size and importance, it is increasingly vital for board members to understand their evolving role and the importance of their contributions to successfully accomplishing an organizations mission.

BOARD MANAGEMENT
Board Management is the process of building an effective board and educating board members about their governance role. Effective board management can help board members grow and develop together. Board Management is critical in helping members to understand their responsibilities, recruiting and retaining members.

COMMUNICATIONS
Communication is a process by which information is exchanged between individuals through a common system of words, symbols, signs or behavior. Communications in governance can range from the development of board relationships to the facilitation of board meetings. Communications in governance is important in order to have a common understanding for individuals at all levels of the organization.

FINANCIAL MANAGEMENT
Financial Management is the process through which short and long term financial goals are addressed. It is important for board members to be aware of their financial responsibilities. Financial Management can also help board members in the decision making processes of the organization.

PLANNING
Planning is the continuous process of analyzing information, making decisions and formulating plans of action for the future. The planning process involves setting goals and identifying the best methods to achieve those goals. Planning in governance can include preparing a strategic plan.

POLICIES
Policies are guiding principles designed to influence decisions and actions. Policies are intended to help boards govern within a set of agreed-upon standard guidelines. Governance policies can help keep a system of checks and balances in place and help board members hold each other accountable.

PRINCIPLES
Principles are the standards that describe how board members should morally approach their positions. The mission, vision, values, and goals of the organization should be at the forefront of the decision making process. When allocating money, approving programs, and making recommendations board members should always take into account what is best for the organization.

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