Nonprofits Adopt Governing Policies

Since the implementation of Sarbanes-Oxley, board governance policies at not-for-profit organizations have dramatically changed, especially when it comes to whistleblower and conflict-of-interest policies.

Of the 89% of organizations that have a conflict-of-interest policy in place, more than nine out of 10 require board members to sign the policy and more than two-thirds (68%) have executive management sign—an increase from 50% in 2003. Requirements for committee members to sign were also up this year—41% vs. 29% in 2006.

Nearly 70% of organizations had whistleblower policies. Whistleblower complaints are most often submitted to the chairman of the audit committee (in 21% of organizations), legal counsel (19%) or executive management (18%).

Other popular board governance policy changes included:

Implementation of accounting policies

Revision of investment policy

Establishment of audit committee

Update of record-retention policy

Establishment of code of ethics

Establishment of policy for board members to review Form 990/990-T

Source: Grant Thornton LLP’s National Board Governance Survey for Not-for-Profit Organizations, www.grantthornton.com .