Nonprofit Organizations

526 Words2 Pages

The hierarchy within nonprofit organizations may vary according to the organizations size, type of service they provide, and industry. The board of directors, CEO, and executive director all work together to meet the strategic objectives and the mission of nonprofit organizations. In the following paper, it will briefly examine the board of directors, CEO, and executive director’s role within nonprofit organizations. It is important to develop and maintain internal controls inside nonprofit organizations because they assist in maintaining ethical standards. According to the National Council of Nonprofits (NCN) internal controls are financial management practices which are systematically used to prevent misuse and misappropriation of assets …show more content…

They may accomplish this by thoroughly evaluating the organizations balance sheet, ensuring the organization is following all federal and state laws, managing financial risk, and communicating financial transparency. For example, if there is an oversight by state or federal regulators the board have a responsibility to report or correct any misinformation. One of the ways financial transparency for the organization may be communicated is by making financial statements accessible to the public. The financial risk of the nonprofit may be managed by evaluating the profitability, liquidity, days receivables, cash flow, and operating managing. The financial risk may be examined annually, throughout the fiscal year or semi-annually. The board of directors and executive director would work together to ensure the organization is meeting their financial objectives to efficiently maintain operations and meet the organizations mission. Nonprofit leadership should also have an accountability measure of their performance which many be done in the form of an assessment. The board members should conduct a formal written assessment of the CEO/Executive director each fiscal year to provide feedback on strengths and weaknesses. Also, the board should complete a self-assessment of their performance to assist with ensuring they are meeting the organizations needs from a leadership

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