Some board-related documents may be rather foreign for first-time board members. This help sheet aims to give you a leg up on what sort of papers you may encounter and how you should be using them.
Annual reports provide information about an organisation's activities over the previous year and an outlook for the future. These are very important documents that help to keep members and other interested parties informed about the organisation's directions and priorities, helping the board fulfill its duty to be accountable and transparent.
Annual reports also provide an opportunity for an organisation (and its governing board) to showcase efficiency and effectiveness, as reflected in the past year's achievements and milestones.
Annual reports vary greatly from organisation to organisation, depending on their differing budgets, styles and responsibilities. They may be freely available to the public or produced just for internal reporting purposes. While one organisation may produce no more than a single, photocopied sheet, others will settle for no less than a many paged, glossy, professionally designed document.
Content can also vary. However, some of the more common elements include:
All organisations will be subject to rules of some sort. Many incorporated organisations will have adopted the "model rules" provided by the various state and territory governments, or a variation thereof. Others will have formulated their own rules, constitution or bylaws. Government boards and committees will be subject to rules set out in a particular Act of Parliament.
Whatever the format of an organisation's rules, they will generally cover all aspects of how an organisation must be set up and run. Specific items might cover:
Of particular relevance to boards, the rules should also stipulate:
It is a good idea to make a thorough reading of these both before you agree to join a board and at regular periods during your board service.
Along with the rules and laws that govern their operations, boards will often have a set of policy documents to guide board members in their conduct and decision-making. The number and type of policies will differ from board to board, but some of the more common ones include:
All board members should have a copy of each of these policies and should ensure they are familiar with their content.
A meeting agenda is really no more than a list or outline of things to be considered during a meeting. Agenda styles will differ from board to board but there are usually some similarities. They will often include:
Meeting agendas should be posted to board members well ahead of meetings to allow time for detailed reading and clarification if required. It is important that all members have read and understood the agenda and any supporting documents before any meetings take place.
Financial accountability requires that all transactions are recorded, all payments authorised and that the board does not authorise the expenditure of more money than it can afford. The board's financial documents should allow members to have on hand at any given moment what is owned, how much money is on hand and what needs to be paid. Board members should become familiar with all financial documents as financial accountability is one of the board's most important areas of supervision.
Most boards will have a financial procedures manual, which outlines financial processes and systems, the responsibilities for administrative tasks, authorisation limits and procedures, and descriptions for how functions such as paying bills, depositing cash and transferring money between funds are handled.
Most boards have their accounts audited every year. The auditor will produce a financial statement showing income and expenditure and a balance sheet showing the assets and liabilities.
While not always legally required, a properly conducted audit can assist the board to carry out forward planning, give valuable information to potential donors and generally lends credibility to the organisation.
Budgets usually coincide with financial years and cover the two main areas of expenditure and income, showing how much money is expected to be coming in and how much will be going out. As budgets are generally no more than an educated guess on incomings and outgoings, they are often reviewed during the year to take account of changes that may occur. Budgets are an invaluable tool for board members in carrying out their duty of financial oversight.
While a budget serves a short-term (12-month) function, a longer range financial plan is designed to allow boards to plan for the future, anticipating spending and income for the next three to five years. Like the budget, an organisation's financial plan is an invaluable tool for board members in carrying out their duty of financial oversight.
There are a range of insurance policies regularly taken out by boards. Among the more common are policies that provide:
The higher the risk, the more insurance you and your board will require. The board should have on hand details of what insurance it holds for its board members, how much coverage is provided and for how long members will be covered. You should read the policies and familiarise yourself with the language they use. If in doubt, get someone to explain it to you.
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