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Tips to Improve the Effectiveness and Involvement of the Governing Board
By Tara Bradley
The Board of an organization is typically comprised of a group of individuals that are elected or appointed for the oversight of the activities and governance of the entity. Depending on the type of organization, the board may have differing responsibilities, sizes and procedures, but the primary function of the board remains the same. The board is charged with organizational governance; a task that can be demanding and challenging. There are several ways to assist the board in accomplishing its objectives and enhancing board efficiency and effectiveness. However, it is important to note that some of these suggestions may not be suitable in all circumstances.
- Use of Technology – Given the advancements in technology and the increased communication options available today, many boards could use this to their advantage.
- Advanced Notice – Provide each board member with a meeting agenda and new materials to be discussed, prior to the date of the meeting to allow adequate time for review. This can be especially helpful for items such as new policies, audit reports, finding letters, agreements, etc. These items can be emailed or mailed out ahead of time. Board members will be more prepared to discuss the items at the meeting and have their concerns ready to bring to the board.
- Interim Communications – It is very common for boards to meet only once or twice per year. In these situations, many agenda items may be tabled until a future meeting which can slow down progress in some cases. A new trend is the implementation of email/phone voting policies for special circumstances that arise between scheduled board meetings. This would require that all members of the board agree to participate and vote in this manner and a formal policy be approved outlining the specifics of the voting procedures. It is important that the process remain fair and controls be implemented to ensure that each board member retains an equal opportunity to raise questions, concerns, and vote.
- Risk Assessments – Discuss risks facing your entities and ways to mitigate those risks. This would include both internal and external risk factors. Risk management is one area that many boards may not spend enough time. Often, matters are not discussed until an incident has occurred that requires immediate attention. Boards are encouraged to take a more proactive approach to risk assessment by brainstorming on ways that fraud could occur within the organization and outside factors that may impact the industry, region, or organization. If a policy or change is needed to address or limit the effects of those risks, the board would be in a better position to implement the necessary safeguards to prevent a loss or theft. It is also important to understand that the business environment is ever changing, which in turn means new risks can develop. The consideration of risk should be an ongoing activity for this reason.
- Utilize Resources – Provide board members with contact information for the auditor, consultants, and other professionals familiar with your organization, which can be utilized as an information resource when questions arise throughout the year. Communication between the auditor and the board should occur each year to ensure that the board is fully aware of the audit plan, their responsibilities in relation to the audit, and the findings identified. This communication can be very useful to the board to assist in risk assessment and ensuring that any control deficiencies identified are appropriately addressed.
- Meeting Minutes – It may be helpful to designate an individual that will be responsible for taking minutes prior to the meeting and also develop a system for how those minutes will be distributed to the other board members after the meeting. This individual would document the information discussed and decisions made at each board meeting. This seems simple enough, but many times the documentation of what the board has done is lacking. While there is no formal list of required information to be maintained, many free templates are available that can be used to structure the meeting documentation. Some examples of relevant information would be the meeting dates, members present, policies approved, agreements approved, significant decisions made, budget amendments, etc. See the link below for several templates that can be used to assist in the documentation process.