A board of directors depends on a variety of documents in order to fulfill its responsibilities, ranging from legal requirements to internal guidelines and policies. To be able to make informed decisions, the board must have access to concise, clear and complete information.
It is crucial that any non-profit organization has proper documents for its board to ensure success. A board can get bogged down in administrative tasks without the appropriate materials and lose focus on the strategy. It is essential to keep these five documents readily available in order to ensure that your board is meeting its fiduciary obligation of accountability.
Board papers are the documents that board members review before and during meetings. They are crucial because they provide the context and background that enables boards to make informed decisions. To be effective, board documents should be clear, concise and complete. It is a combination of the three C’s of communication:
Financial Statements
Board members need a quick and easy overview of the financial health of the company to understand what is owned, how much money is in the bank and what expenses are approved by the board. The board needs to be familiar with the financials of the company in order to ask the pertinent questions at meetings, and oversee the CEO’s financial accountability.