Publications
A New Imperative in Nonprofit Governance
Ever since Congress enacted the American Competitiveness and Corporate Accountability Act of 2002, more commonly called the Sarbanes–Oxley Act or, for brevity, “Sarbanes” (some use the acronym SOX), people in the nonprofit world and those who advise them have been discussing and speculating on what it means for nonprofits. The short answer: a whole lot. That’s not because the law itself directly applies to nonprofits, including independent schools (with two exceptions discussed later), but because of two other reasons. First, Sarbanes provides a roadmap for people who believe that legislatively mandated reform of the nonprofit sector is essential to curb what they perceive as abuses of tax-exempt status. Second, the reasons why Sarbanes was enacted have provided the basis for an increasing awareness within the sector itself that nonprofit institutions need to pay much closer attention to their governance structure and practices if they individually — and the sector as a whole — are to continue to enjoy the confidence of their constituents. Elements of Sarbanes that are adaptable to nonprofits have been added to the compendium of best practices in the nonprofit sector. Schools looking to stay ahead of the curve should consider how those practices can be incorporated into their governance and management structure.
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For an extended examination of nonprofit governance click here to purchase the booklet “Holding The Trust: An Independent School Trustee’s Guide To Fiduciary Responsibilities.”