All Things Governance: Financial Governance, Part 3

Now that we’ve got the bylaws covered (you can find that blog here), it’s time to dig into financial governance.   

If you don’t keep track of where the money is coming from, going to, and if it’s being used in a responsible way that aligns with your mission – you're not running a company, you’re running a front. And we’ve all watched The Godfather enough times to know how that turns out. 

Here are the elements that go into excellent financial governance:   

Financial Procedures / Roles and Responsibilities  

Spell out how the money moves through the organization. You need to cover things like: who approves the budget, who approves expenses, who signs the checks, and who deposits funds.  

Budget  

Make sure that you’re asking yourself these important questions: Where is the money coming from? What are you spending the money on? How much are you allocating to which budget lines? Is your budget aligned with your mission?  

Financial Reports  

Just as having a buttoned-up budget process is critical, consistently sending accurate financial reports to management and the board is equally critical. This keeps everyone in the loop so they can make informed decisions.  

Financial Oversight Policies  

Ensure you are adhering to tax laws, accounting standards, and industry regulations. As well as a comprehensive plan for fraud prevention.   

Audits  

This should cover the things you will do an internal vs an external audit for. And how often you are going to do them. 

Just like in bylaws, every element should align with your mission and uphold business ethics. If you comb through all of these parts, you’re ensuring ongoing sustainability for your organization.  

Take Action    

Sign up for my course on how to increase your board’s engagement. We’ll go into even greater detail on financial governance and how it relates to getting the most our of your board. As well as diving into: What board engagement really means; Building culture and expectations; Igniting purpose and ownership; Creating accountability that works; Tools, templates, and techniques to sustain momentum.   

Learn more and sign up for The Board Engagement Accelerator here!