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Redefining the board's role in fiscal planning
Nonprofit Management & Leadership
|December 5, 1991
Summary
Traditional board budget approval can hinder leadership. A new governance model suggests boards should set financial policies, allowing managers to handle budgeting, thus focusing boards on strategic goals.
Area of Science:
- Organizational Governance
- Financial Management
- Nonprofit Management
Background:
- Traditional board budget approval is a common practice but can undermine effective governance.
- This process may limit managerial autonomy and distract boards from strategic priorities.
Purpose of the Study:
- To challenge the necessity of conventional board budget approval.
- To propose an alternative governance model for financial oversight.
Main Methods:
- Conceptual analysis of board authority and managerial prerogatives.
- Argument for a new governance paradigm focusing on policy-driven financial planning.
Main Results:
- Conventional budget approval can be dysfunctional, diminishing board leadership and managerial roles.
- A policy-based approach empowers managers and allows boards to concentrate on strategic objectives.
Conclusions:
- Boards should shift from direct budget approval to establishing financial policies.
- This empowers management and enhances board focus on program priorities and organizational goals.