How do you go about taking your financial governance from good to great?
The pursuit of great financial governance was the topic of an education session I attended at the 2023 American Society of Association Executives (ASAE) Annual Meeting and Exposition. The presenters, Thomas McCally and Heather Dean of Cordia Partners, touched on six areas that all association management professionals and their volunteers should be aware of.
In the second part of this article series, I will address board norms and internal financial reporting.
Board Norms: Each association is unique, as is their board of directors. According to Oxford Languages, a norm is something that is usual, typical, or standard. While each association can and should develop norms, here are a few ideas related to meeting norms that I’d like to share with our clients.
It is important to challenge ideas and not individuals.
Share your thoughts during a discussion and do not let anything stay bottled up.
Encourage all board members to share their thoughts and opinions, not just the most outspoken individuals.
Always respect other board members’ contributions and ideas, even if you don’t necessarily agree.
Be open to new ways of thinking and don’t get stuck in the mindset of “we’ve always done it this way.”
Internal Financial Reporting: Internal financial reporting between the management company and your board of directors is a necessity. Most clients have similar monthly financial statements including a statement of financial activities (budget vs. actuals), statement of financial activities (previous year comparison), and a statement of financial position.
These statements should be shared with the board treasurer, finance committee, executive committee, and board of directors. In addition, the board treasurer should be prepared to give an overview during an executive committee or board of directors meeting, focusing on any specific areas of importance and be prepared to answer any questions. All board members should take some time to review the financial statements prior to the meeting.
Volunteer leaders and their association management professionals should have regular discussions on the areas listed above. Stay tuned for part three, focusing on audit and tax compliance and insurance. BL