An effective governance structure and a strong, active, and committed governing body is crucial to the soundness of an organization and its ability to achieve its mission and objectives. The plan of governance of an NGO should reflect the core values, mission, and cultural standards of the organization. Democratic principles should be used where applicable. The governing body of an NGO (generally a board of directors or trustees ) holds ultimate responsibility for all activities and resources of the organization. This includes establishing the direction of the organization, beginning with its mission statement, and assuring that the mission statement is appropriate and relevant as times change. The governing body also determines the organization’s activities and monitors their compliance with the mission. The governing body exercises responsibility for obtaining and appropriately employing the human and financial resources to carry out the organization’s mission and sustain the organization, and oversee fiduciary and legal requirements.

A. Governance Structure

1. Plan of governance. An NGO should establish a plan of governance that best allows it to fulfill its mission, and reflects the core values and cultural standards of the organization.
Democratic principles should be used where appropriate and applicable.

2. Organizing documents. The organization’s governance structure—including rules relating to the conducting of business by the governing body and, if applicable, an executive committee that acts between board meetings, and the procedure for electing and appointing officers and their roles—is to be clearly specified in the organizing documents (bylaws, etc.) and available to all interested parties.

B Structure of the Governing Body

1. Director resources. An NGO’s governing body should consist of individuals who are dedicated to the mission of the organization , willing to volunteer their time and energies
toward achievement of the mission, and able to offer substantial contributions to the organization. Among resources they may bring to the governing body are experience and wisdom; prestige; the ability to raise money for the organization; and professional skills, such as legal, accounting, management, fundraising and marketing professionals.

2. Unrelated directors. The governing body should have at least five unrelated members.
Family relationships are accepted between two members at most, but then the board
should have seven or more members.

3. Policies on paid staff. An NGO should have a policy restricting the number of paid staff
who are voting members of the governing body, ideally to no more than one person or
10% of the governing body. An indirectly or directly compensated person should not
serve as the governing body’s chairman or treasurer.

4. Term limits. Term limits should be established for membership on the governing body. Ideally, individual terms should be set at a maximum of three years, no more than three consecutive terms should be allowed, and at least one year should be required before a member becomes eligible for re-election after completing the maximum number of consecutive terms.

5. Nominating committee. The procedure for nominating members to serve on the governing
body should be known to members and other relevant parties.

6. Diversity. The governing body should have broad re p resentation, reflecting the diversity of the NGO’s constituencies. An NGO may enhance particip- ation of members from diverse geographical distances if the organization’s bylaws, and the local or national law, allow meetings via such technologies as teleconferencing.

7. Bylaws. Each member of the governing body should be presented with the bylaws of the organization and familiar with these bylaws.

8. Compensation. Members of the governing body should not receive compensation for their board service. They may receive re i mbursement for expenses directly related to their board duties.

C. Responsibilities of the Governing Body

1. Mission statement. The governing body should establish the direction of the NGO, by creating or adopting the mission statement, reviewing it periodically for accuracy and validity, and revising it as necessary or desirable.

2. Programs and compliance. The governing body should determine the NGO’s programs and services, and monitor their compliance with the mission and their effectiveness and efficiency.

3. Resources. The governing body should ensure the organization has the proper resources to fulfill the mission.

4. Annual budget and fundraising. The governing board should approve the annual budget and actively participate in the fundraising process. In approving the annual budget, the governing body should ascertain the percentage of the resources spent on administration and fundraising, versus program expenses, and strive for a goal of at least 70% of revenue being used for programs.

5 . Resource management. The governing body should manage the resources effectively,
and provide oversight regarding fiduciary and legal requirements.

6. Chief executive officer hiring and evaluation. The governing body should hire the chief
executive officer, undertaking a careful search process to find the most qualified individual. The governing body also should set the chief executive officers compensation, ensure that he or she has the moral and professional support needed to advance the goals of the NGO, and periodically evaluate his or her performance.

7. Strategic planning. The governing body should actively participate with the staff in long term and short term strategic planning process, including defining goals and objectives and the success of the NGO toward achieving its mission.

8. Code of ethics and conduct. The governing board should approve a code of ethics and
conduct for the NGO, and assure that the organization is in compliance with this code.

9. Ambassadors for the NGO. Members of the governing board should serve as ambassadors
for the organization, articulating its mission, accomplishments and goals to the public, and garnering support for the org anization.

D. Conduct of the Governing Body

1. Meetings of the governing body. The governing body itself, and any subset of the governing body (executive committee) which is authorized to conduct the affairs of the NGO between meetings of the governing body, should meet as frequently as is necessary to fully and adequately conduct the business of the organization. At a minimum, there should be a least 4 meetings annually of the governing body or the governing body and the executive committee combined. If face-to-face meetings are not required by local or national law and the organizing documents, then communication technologies can aid in conducting frequent meetings.

2. Minutes. Minutes of each meeting of the governing body and executive committee, and reports of each committee when acting in the place of the governing body, should be
produced, distributedto each member of the governing board, and archived for future
reference. The minutes also should be available to an association’s membership, officers,
staff, and the general public, with the exception of discussions related to personnel evaluation and other such confidential information.

3. Responsibility for conduct. The governing body should be responsible for its own conduct.
The governing body should establish written expectations for board members (including expectations related to service on committees, attendance at meetings, and participation in fundraising and program activities), and annually evaluate its own performance. If not already established in the organizing document, the governing body should establish job descriptions for its officers (chair, treasurer, secretary, etc.).

E. Conflict of Interest

1 . Best interests of the NGO. In serving on the governing body, directors should put organizational goals before personal goals, and put the best interests of the organization
ahead of individual desires.

2. Matters impacting a director. No director should participate in the discussion or decision
of a matter directly impacting that individual (such as re-election to the governing body, personal remuneration, etc.)

3. Disclosure. Each director should disclose all potential and actual conflicts of interest,
including each institutional affiliation he or she has that might possibly involve a conflict of interest (such as sitting on a board of another NGO with overlapping goals and missions). Such disclosure does not preclude or imply ethical impropriety.

4. Written conflict of interest policy. The governing body should develop a written conflict of interest policy, which is applicable to the directors and to any staff and volunteers who have significant decisionmaking authority regarding the organization’s activities or resources, as well as relevant organizational partners.

5. Signature. The governing body should provide its members with the written conflict of interest statement, which should be signed by the individual at the outset of each term of service.

6. Loans to members of the governing body. If an NGO has provision for making loans to
members of the governing body, there should be a policy describing how the loans operate. All loans or transactions with members of the governing body should be included in the NGO’s full financial reports and publicly disclosed.