The Importance of Transparency as a Non Profit - posted by KAZB Executive Director, from CFA Institute

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The Importance of Transparency as a Non Profit - posted by KAZB Executive Director, from CFA Institute

Post  admin on Wed Dec 14, 2011 8:31 am

Transparency can help build partnerships and stimulate contributions because each party understands clearly where efforts and finances are being placed and best utilized.

The concept for TRANSPARENCY and openness is popular in government and appointed boards to promote awareness. In private associations, chambers and other nonprofits, many boards of directors have followed the example.

Transparency should remove perceptions of secrecy and closed door sessions. To communicate the guiding principle of transparency, many organizations have adopted it as a value for the board and staff. Yet is it important not to confuse transparency with the disclosure of confidential information. The intent is to be responsive (or pro-active) when information is requested in the appropriate settings and when it is relevant. It should not be interpreted as a standard for disclosing every document or holding open door meetings. In addition to adopting a value or guiding principle expressing transparency, some organizations have developed a policy statement.

Policy Sample
The Board of Directors desires to conduct business in an atmosphere that is open and transparent with the goal of promoting trust and understanding. Unless there are compelling reasons to the contrary4, the organization is responsive to members and the public who request relevant information affecting them and actions of the Board in a timely fashion.
The organization realizes that it requires resources (staff time, copies, summaries, for example) to assure that this policy is achieved.
Recognizing that transparency requires ongoing efforts, the organization will work to identify new means to communicate effectively with the membership (i.e. executive summaries, access through technology.)
To promote transparency, organizations can follow these best practices:
- Share information and progress on a timely basis with the membership and appropriate persons
- Discussion and decisions made in board meetings that are not executive sessions get recorded in meeting minutes.
- Follow public records as set by law
- The financial position of the organization as reported and/or certified by an independent auditor
- Utilize Board approved policies and positions
- Encourage participation of members in leadership activities and solicit their input to benefit the board’s decision-making process.
- Balance the intent for openness --- with sensitivity to privacy, confidentiality, and the need for free and frank discussion at the board table.

Credit: The sample policy on transparency and openness was provided by the CFA Institute. Adapted with permission.
http://www.cfainstitute.org/about/governance/Documents/board_openness_and_transparency_poli cy.pdf

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