Evaluating Volunteer Boards

The Sarbanes-Oxley Act 2002 was enacted to address numerous issues involving ineffective corporate governance. While significant emphasis was placed on the corporate governance of publically traded corporations, other organizations are not necessarily exempt from many of the same requirements.

Effective governance – the result of principled execution
Volunteer directors are often publically acknowledged for their contribution to the organizations on which they serve; for their unselfish (unpaid) contribution of time and talent to a worthwhile endeavour; and for their leadership in advancing public causes. In fact, without volunteer directors the numerous non-profit and not-for-profit community organizations, service clubs, social clubs, political and religious organizations could not exist. And as so many of these successful organizations demonstrate, effective corporate governance has little to do with financial rewards (pay and perks), and everything to do with unselfishness, with a high sense of ethical and moral conduct, and with the non-negotiable desire to do the right thing for all the right reasons. To the point: Good corporate governance results from principled execution rather than from the exchange of monetary rewards.

Volunteer director evaluations – a sound practice
The Board of Directors of a volunteer organization faces many of the same challenges and issues that publically traded corporations encounter. Purpose must be defined, mission statements agreed to, budgets established, competent management put in place, records maintained, regulatory bodies satisfied, and stakeholders best interests protected. Furthermore, unpaid volunteer directors are not exempt from liability resulting from the unfaithful performance of their duties, responsibilities and conduct. Therefore it is incumbent upon volunteer boards to continuously review their corporate governance policies, practices, and the performance of individual directors. Conducting an annual performance evaluation of the whole board, individual board committee’s, and each individual director is unquestionably a sound corporate governance practice.

Establishing the foundation for success
To ensure that your volunteer organization has all the right processes in place we highly recommend the following tried and tested tools available from Bauschke & Associates:

1. Corporate Governance Policy
Provides you with a customizable set of policy statements that include Corporate Governance Principles and Practices; Charter statements for the Audit Committee, Compensation Committee, Corporate Compliance and Quality Assurance Committee, Nominating/Corporate Governance Committee, and Finance Committee; and ready to use forms such as Pledge of Confidentiality, Related Party Certificate and Related Party Inventory.

2. Director-Online© Performance Appraisal System
A web-based director performance evaluation software program that is designed to accommodate a full board evaluation, individual board committee evaluations, and 360 degree evaluations of individual directors. Fully customizable to reflect the requirements and expectations of directors in your peer industry, your local organization, as well as the requisites of law and regulation. Director Online© is easy to use by both experienced and newly elected directors. Its design and functionality will appeal to all types of volunteers and volunteer organizations regardless of your size, complexity or unique circumstances.

3. CEO-Online© Performance Appraisal System
A web-based performance evaluation software program that provides the framework for evaluating the performance of your organization’s CEO (Chief Executive Officer). Performance targets include both objective and subjective factors that are fully customizable to reflect the uniqueness of your organization and can be weighted to focus your CEO’s attention on the most critical performance issues. Best still, CEO Online© offers a CEO compensation analysis feature that will assist your board in setting total compensation values and compensation policies.


Investigate these exceptional offerings today

Visit our website at www.bauschke.com for more information about these valuable tools, including video presentations of these outstanding web-based products. Or call 1-800-665-7776 to discuss your unique needs and circumstances.

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