One Consultant; national expertise

As a client of Global Philanthropic, you deal with a Lead Consultant who you come to know over the course of your work together. But behind that Consultant is a robust national consulting family with more than 450 years of collective fund development expertise. You may see only one, but you benefit from the collective wisdom of all.

Recently, a Consultant posed a governance question to our team.  Within a day, he received the following advice. He was able to respond quickly to his client with multiple perspectives based on a wide range of experiences. This was the email thread.

Q: The volunteer Board Treasurer resigns. The Chair asks: can the Board retain a paid consulting Accountant (non-Board member) as Treasurer?

“Governance is governance.   Management is management.  The whole idea of a governing Board is to provide oversight to management (amongst other duties).  I recommend against this.” – Guy Mallabone

“If this organization was in the US, paying a Director is standard practice, but as an honorarium. I suggest you consider a similar approach. – Ibrahim Inayatali

“Would it make sense for the organization to hire an auditor that would report to management and management then report to the Board?  It will be interesting to hear what Chuck (CFO) has to say, there are probably ethical standards for professional accountants. – Val Hoey

“This can be done with a change to bylaws. There are situations I have be seen in which the senior manager in charge of accounting is also the Treasurer. This is no different than the CEO being Board Secretary. The key here is that the Board can’t abdicate its fiduciary responsibility. There still needs to be a Finance Committee chaired by a Director. The Treasurer reports into this committee. Call a governance lawyer for help.” – Bob Baker

“Bob is right: the Board must respect and meet its financial responsibility. There should be a Finance Committee, chaired by a Director. I do not see a problem for them to have a professional accountant who is accountable to them. In the end, they make the decisions. And I agree getting legal advice, especially on any bylaw changes, is the best approach.” – Nick Locke

“Along the lines of what Bob and Nick have said: hiring the accountant is separate from the position of Board Treasurer. A paid accountant can do the accounting – or often the finance person on staff – but not as a Board member. The position of Board Treasurer is filled by a volunteer who reviews the work that the accountant or finance staff does. So, if the position of Treasurer is temporarily vacant – then wouldn’t the Board Chair review the reporting from the accountant, and present the report to the Board or Finance Committee for review?” – Corrie Fortner

“Bob is mirroring what I would share based on my experiences. It is far from ideal, but there are examples where senior leadership occupies a role at the Board. However, they shouldn’t be chairing their area and should still be accountable. We see this with Secretary quite frequently. However, with a Treasurer position, things would have to be structured so that the Board is still owning their fiduciary responsibility.” – Jeff Sodowsky

“It is my understanding that the Board needs to name a Treasurer as an Officer of the corporation and that person needs to be a Board member.  They can sub out the accounting function or the bookkeeping function and they can have non-Board Finance committee members, but someone on the Board needs to be Treasurer.  It can be the Chair of the Board.” – Chuck LaFleche

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