Skip to main contentSkip to main navigationSkip to footer content

Questions? Contact Us.

Emily Treadaway

Board Governance

VIEW Governance AS A PDF

Nonprofit boards must adopt core governance policies to ensure legal compliance, ethical conduct, and f inancial accountability. Essential policies include a Conflict of Interest Policy, Whistleblower Policy, and Document Retention/Destruction Policy. Other critical policies include executive compensation, gift acceptance, and financial internal controls. *IRS Form 990 asks if a nonprofit has adopted these documents.

Essential Governance & Ethical Policies

  • Conflict of Interest Policy: Required by the IRS, this defines conflicts, mandates annual disclosure, and ensures interested parties abstain from voting. 
  • Whistleblower Policy: Protects employees and board members from retaliation when reporting illegal or unethical behavior. *Included provision in Sarbanes-Oxley Act 2002.
  • Document Retention and Destruction Policy: Outlines how long to keep records (tax, financial, personnel) and how to securely destroy them. *Included provision in Sarbanes-Oxley Act 2002.
  • Code of Ethics/Conduct: Sets standards for integrity and behavior for board members and staff.

Financial & Risk Management Policies

  • Executive Compensation Policy: Ensures the board sets compensation for the CEO/Executive Director that is reasonable and documented.
  • Gift Acceptance Policy: Guides what types of donations (cash, in-kind, real estate) the nonprofit will accept and under what conditions.
  • Joint ventures: If the organization has participated in a joint venture, the IRS Form 990 asks whether the nonprofit took steps to avoid prohibited private benefit. (Part VI, Section B, line 16)
  • Investment Policy: Defines how the organization manages, invests, and risks its assets.
  • Travel and Expense Reimbursement Policy: Sets rules for legitimate business expenses.
  • Nonprofit Financial Commons: Example Financial Policy

Operational & Human Resources Policies

  • Anti-Harassment and Anti-Discrimination Policy: Prohibits illegal workplace behavior.
  • Data Privacy/Donor Confidentiality Policy: Governs the protection of donor and client information.
    • A donor privacy policy should include what types of information the nonprofit is gathering, how the information is used, if the information is shared with others and, if so, under what terms, as well as providing donors with a way to opt-out of certain aspects of a nonprofit’s use of donor data. Provident Law
  • Emergency Succession Plan: Ensures leadership continuity if the Executive Director leaves unexpectedly.

Best Practices for Boards

  • Annual Review: Policies should be reviewed annually to ensure they remain relevant and compliant.
  • Signature Requirement: All board members and senior staff should sign the  Conflict of Interest policy annually.
  • Customization: Policies should be tailored to the specific size, mission, and risk level of the nonprofit.

Other Resources