Nonprofit corporate governance materials include bylaws, board committee charters, and conflict of interest and other policies. These are archetype legal documents.
We think it’s useful to think of them in other ways as well:
- They serve as user’s guides, a set of directions for managing a legal entity subject to special rules arising from corporate, nonprofit, and tax-exempt status.
- They serve as educational tools; users learn about legal requirements through use of the documents.
- They have a wide readership; governance materials are used by an extraordinary variety of organizations, some grassroots and others with billions in assets, with widely varied (and changing) readerships and access to legal support.
We try to keep in mind the image of an overworked executive director and a volunteer board chair trying to raise money, manage the organization, develop the staff, recruit directors, and plan the work of the board — and who want to do the right thing in terms of legal compliance and best practice. It’s motivating.
These perspectives influence our approach to advising clients about governance:
- We provide clients with an overview document that summarizes core governance arrangements and expectations. It’s an efficient tool for orienting directors, and more accessible than a big handbook.
- We try to keep bylaws and board committee charters short and general in nature, in order to improve readability and reduce the risk of noncompliance and need for amendment.
- The conflicts and other policy templates include information about underlying legal principles and set out specific procedural steps and documentation instructions, an approach intended to increase legal, educational, and practical functionality.
- We provide practical pieces intended to help make fiduciary responsibilities more concrete and facilitate adherence to corporate formalities. We think such documents can be effective to educate corporate leaders, capture topics that deserve board attention, and make good use of director time.
Here’s an example of a practical tool, a high-level agenda planning tool for the board:
Our goal is to produce materials that do the needed legal and record-building work and are recognizably legal in nature, but that are also designed to educate, provide accessible and practical direction, minimize risk of non-compliance, and reduce ongoing maintenance burdens.