The post Changes to non-profit legislation in Saskatchewan appeared first on Virtus Group.
]]>The Non-profit Corporations Act, 1995 has been in place for many years. In 2022, the legislation was updated to modernize the Act and reflect the current operating environment. The Non-profit Corporations Act, 2022 was enacted in May 2022 with a wide variety of changes.
We recommend that organizations review the new Act to determine whether any changes in your governance structure or practices are required – our observation is that some organizations won’t be impacted at all, but others may need to make a number of changes to comply with the Act.
On December 16, The Non-profit Corporations Regulations were published but will not be effective until March 12, 2023 (see this article for more information). The most significant change in the Regulations is an increase to the thresholds defining when a charitable corporation requires a review engagement or an audit report on the annual financial statements.
For a review engagement, it will be required for revenues greater than $100,000 (previously $25,000) and for an audit engagement, the threshold has increased to revenues greater than $500,000 (previously $250,000).
Organizations with revenues under these thresholds may still require a review or audit engagement due to funding agreements, loan agreements or internal policies. We would be happy to discuss your situation to determine if a change in your reporting would be appropriate.
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]]>The post TCC reminds corporate directors to actively consider tax appeared first on Virtus Group.
]]>Authored by RSM Canada
In Burnett v. The Queen, 2022 TCC 99, the Tax Court of Canada (TCC) held that a director of a Canadian corporation did not satisfy the due diligence defence provided in the Income Tax Act(ITA), which is available when the Canada Revenue Agency (CRA) pursues a director for unremitted payroll source deductions of a corporation. Burnett serves as a reminder that a director must actively address a corporation’s tax remittances and that delegating responsibility for source deductions (or GST) is not a sufficient defence to avoid personal liability.
The ITA and the Excise Tax Act (ETA) contain provisions that allow the CRA to collect unremitted payroll source deductions and GST from a director of a corporation in certain circumstances. Corporate directors can defend themselves against personal liability for the corporation’s unpaid source deductions or GST by demonstrating due diligence with respect to the pertinent tax filings.
The test to determine whether a director exercised proper care with respect to unpaid source deductions or GST was established by the Federal Court of Appeal (FCA) in Canada v. Buckingham, 2011 FCA 142. The FCA in Buckingham adopted an objective test, in which the particular circumstances of the director are taken into account and measured against what a “reasonably prudent person” would do in similar circumstances. The FCA specified: “…directors (are required to) establish that they were specifically concerned with the tax remittances (emphasis added) and that they exercised their duty of care, diligence and skill with a view to preventing a failure by the corporation to remit the concerned amounts.”
Part of the FCA’s rationale for adopting a strict objective standard—considered more difficult to satisfy than one that accounts for subjective elements—was to “discourage the appointment of inactive directors chosen for show or who fail to discharge their duties as director by leaving decisions to active directors.”
In Burnett, the appellant was assessed with liability as a corporate director with respect to payroll source deductions that were unremitted by a British Columbia corporation (the Corporation). The Corporation was in the business of diamond cutting. The appellant served on the board of directors of the Corporation during the months the Corporation had unremitted payroll source deductions. There were two other directors: the president of the Corporation, in charge of day-to-day operations, and a business associate of the appellant whom the Corporation retained as an advisor. The appellant also held officer positions as secretary and treasurer of the Corporation.
The appellant viewed himself as an “outside director,” as he had no involvement in the day-to-day business operations of the Corporation.
The appellant’s expertise was as a capital markets advisor focusing on “go public” transactions, and he had served as a director of numerous private and public corporations over the course of 30 years. He appeared successful in raising capital for the Corporation.
The TCC addressed the issue of whether the appellant could rely on the due diligence defence he provided. As described above, the due diligence test provides that a director is not liable for a failure to remit if the director exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.
The TCC’s decision appears to turn on the evidence the appellant adduced at trial. The appellant testified that at each board meeting he asked one of the other directors, his business associate, whether payroll remittances were current. That director’s response always indicated that all was up to date and there were no concerns. The appellant called this “check the box” questioning. He stated that he never felt compelled to independently check that payroll remittance was up to date or properly completed.
The appellant added that the Corporation had difficulty preparing audited financial statements and maintaining reliable books and records. The appellant prioritized obtaining audited financial statements, as they were necessary for the Corporation to be accepted as a publicly listed corporation.
The TCC judgment included the following excerpts of the appellant’s testimony:
The appellant explained his expertise was not tax, and his time was allotted to a different function in the Corporation. Applying the objective test established in Buckingham, the TCC found the appellant’s testimony ran against his desired defence.
The court analyzed the appellant’s satisfaction with a “check the box” approach, and his failure to verify whether the CRA had received adequate payroll remittances. Further, despite the Corporation’s inability to prepare adequate financial statements for audit, the appellant did not have payroll remittances on his radar because he questioned their “materiality” compared to other issues and considered himself an “outside director.” The TCC found these facts directly at odds with Buckingham, which requires that a director be specifically concerned with the tax remittances at issue.
The Burnett decision is a useful reminder for middle market individuals accepting corporate directorship roles that, although they may not be tax specialists, the CRA can and will hold them to account for certain taxes owed by the corporation. Corporate directorship—even for “outside directors”—is far from a passive role.
Call us at 1-855-206-5697 or fill out the form below and we’ll contact you to discuss your specific situation.
This article was written by Simon Townswend and originally appeared on Jan 17, 2023 RSM Canada, and is available online at https://rsmcanada.com/insights/services/business-tax-insights/tcc-reminds-corporate-directors-to-actively-consider-tax.html.
The information contained herein is general in nature and based on authorities that are subject to change. RSM Canada guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM Canada assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.
RSM Canada Alliance provides its members with access to resources of RSM Canada Operations ULC, RSM Canada LLP and certain of their affiliates (“RSM Canada”). RSM Canada Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM Canada. RSM Canada LLP is the Canadian member firm of RSM International, a global network of independent audit, tax and consulting firms. Members of RSM Canada Alliance have access to RSM International resources through RSM Canada but are not member firms of RSM International. Visit rsmcanada.com/aboutus for more information regarding RSM Canada and RSM International. The RSM trademark is used under license by RSM Canada. RSM Canada Alliance products and services are proprietary to RSM Canada.
Virtus Group is a proud member of the RSM Canada Alliance, a premier affiliation of independent accounting and consulting firms across North America. RSM Canada Alliance provides our firm with access to resources of RSM, the leading provider of audit, tax and consulting services focused on the middle market. RSM Canada LLP is a licensed CPA firm and the Canadian member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries. Our membership in RSM Canada Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources. For more information on how the Virtus Group can assist you, please call us at 855-206-5697. |
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]]>The post ESG explained: What companies need to know appeared first on Virtus Group.
]]>Authored by RSM Canada
“The ESG landscape is always evolving,” states Trish Beltran, RSM US LLP ESG advisory services practice manager, “meaning companies need to proactively monitor how this affects their strategy and operations. However, as leaders in the middle market, most of our clients are just starting out on their ESG journey and need to first understand what it is, what is material to them and their industry, and lastly, how ESG overall impacts them before they can sustainably implement a comprehensive program.”
Jake Salpeter, RSM Canada ESG advisory services manager, sees many companies that have a head start. “When it comes to ESG, it can be daunting to embark on the journey, but in most cases, we find that companies—especially those in the middle market—already conduct ESG-related initiatives,” he said. “They have just not formalized plans and assigned key performance indicators to start making decisions based on their data. RSM views ESG as an ongoing process whereby companies should continuously enhance and integrate ESG into their business. It doesn’t happen overnight, but it’s about starting somewhere.”
The following are frequently asked questions that many of our middle market clients ask about ESG and about establishing effective processes.
ESG—often synonymous with sustainability—is a growing topic shaping both internal and external stakeholder expectations, helping employees, investors, partners, clients, and customers understand not only what a company does, but why it does it. It is one way a company can demonstrate its commitment to core values. Over the last 10 years, ESG has grown significantly in global importance. What used to be known as corporate social responsibility is now under the more holistic concept of ESG.
Jake Salpeter, RSM Canada ESG advisory services manager
Once considered a differentiator, ESG is now becoming an essential component of organizational business models and strategy, in both the public and private sectors, due to changing stakeholder expectations.
At RSM, we believe embedding ESG into a company’s strategy and operations in an intentional and meaningful way not only creates alignment with societal objectives but also results in substantial improvements in financial performance. It can address risks such as being accused of greenwashing—falsely promoting something as environmentally sound—while moving companies along their ESG maturity journey.
In practice, ESG can deliver real financial value through:
While the demand for sustainable corporate efforts in North America has historically stemmed from stakeholder requirements and expectations, an emerging?top-down push?is?expected to further drive the future of sustainable business practices, reporting, and the evolution of ESG standards—while increasing bottom-up market expectations.
Most notably, in the United States, the SEC’s proposed rules on climate change disclosures will require listed entities to report, at minimum, their Scope 1 and 2 greenhouse gas emissions, and include disclosures on climate risks, political spending, tax jurisdiction, and executive pay within their public filings.
Globally, regulations are increasing through other notable developments, including:
Trish Beltran, RSM US LLP ESG advisory services practice manager
Whether mandated or not, ESG is being implemented in organizations primarily through ESG reporting. Information is typically disclosed through ESG or sustainability reports which focus on quantitative and qualitative disclosures of data, providing metrics around the environment, social and human capital, leadership and governance, and business models and innovation. These reports typically align with several of the myriad ESG standards and frameworks that exist, including, but not limited to:
Organizations may also develop governance documents, such as policies and procedures, undertake operational changes, and set targets leveraging industry-specific standards and frameworks that provide additional guidance on how to further embed ESG. These can include:
Furthermore, as stakeholders increasingly look for ways to evaluate the performance of organizations, ESG ratings, and scores (both voluntary and involuntary) are being used to make decisions—especially those involving investments.
ESG scoring is a process designed to assess an organization’s ESG?performance or perceived risk, benchmarked against other organizations in the same industry. The score is calculated, by methods proprietary to the respective rating body, through an analysis of a company’s publicly disclosed ESG data or at times through a voluntary intake process.
Though an ESG score is meant to approximate a firm’s entire ESG profile into one number or letter, it is not meant to be used as an exhaustive metric—in fact, the use of ESG scores is hotly debated due to perceived inconsistent methodologies, lack of available data and lack of data assurance. Nonetheless, ESG scores help stakeholders quickly categorize and comprehend the state of a firm’s ESG performance and make decisions based on that performance. The exact methods of calculation and presentation vary by rating body. These rating and scoring providers include, but are not limited to:
Whether you are taking your first ESG steps or enhancing your existing ESG program, RSM can support your organization along this critical journey to sustainably reach your organizational goals, create value and generate societal impact.
Call us at 1-855-206-5697 or fill out the form below and we’ll contact you to discuss your specific situation.
This article was written by Jake Salpeter, Trish Beltran and originally appeared on Dec 19, 2022 RSM Canada, and is available online at https://rsmcanada.com/insights/services/business-strategy-operations/esg-explained-what-companies-need-to-know.html.
RSM Canada Alliance provides its members with access to resources of RSM Canada Operations ULC, RSM Canada LLP and certain of their affiliates (“RSM Canada”). RSM Canada Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM Canada. RSM Canada LLP is the Canadian member firm of RSM International, a global network of independent audit, tax and consulting firms. Members of RSM Canada Alliance have access to RSM International resources through RSM Canada but are not member firms of RSM International. Visit rsmcanada.com/aboutus for more information regarding RSM Canada and RSM International. The RSM trademark is used under license by RSM Canada. RSM Canada Alliance products and services are proprietary to RSM Canada.
Virtus Group is a proud member of the RSM Canada Alliance, a premier affiliation of independent accounting and consulting firms across North America. RSM Canada Alliance provides our firm with access to resources of RSM, the leading provider of audit, tax and consulting services focused on the middle market. RSM Canada LLP is a licensed CPA firm and the Canadian member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries. Our membership in RSM Canada Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources. For more information on how the Virtus Group can assist you, please call us at 855-206-5697. |
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]]>The post Increasing a nonprofit’s impact through operational efficiency appeared first on Virtus Group.
]]>Authored by RSM Canada
Nonprofit organizations often have lean operational budgets. They want to put as much of their resources as possible into fulfilling important missions. But a nonprofit that struggles with its operations will soon find itself with limited mission impact as well.
As such, it is vital that nonprofits be as efficient as possible. Their operations must be as smooth, or even smoother, than their counterparts in the for-profit world. Gone are the days when nonprofits could get away with substandard operational practices.
But there are paths to operational efficiency that are cost-neutral or better. Nonprofits can improve their operational efficiency by undertaking four key actions:
Each of these actions is crucial to increasing an organization’s impact and should be looked at individually.
It can feel intimidating to look at an organization’s structure and say, “What can we cut?” This sensation of being overwhelmed is one reason why so many nonprofits never address their processes or methods.
So don’t do it—or rather, avoid trying to overhaul your entire organization all at once. Instead, take inventory of your key tasks and systems. Look for small changes. Are there steps that were once necessary but are now irrelevant? Are certain activities redundant or needlessly complex?
It is unlikely that every process or every task is important, or even necessary. For example, one nonprofit had a policy that three separate people had to approve a certain report. But it became clear that the last reviewer was just a rubber stamp, and two rounds of approval were sufficient. Eliminating that final round of approval created a substantial gain in efficiency, and importantly, it did so without sacrificing internal controls.
Once the philosophy of eliminating the unnecessary takes hold, an organization can tackle the bigger issues. Another nonprofit, for instance, had four different departments that were essentially walled off from one another. That meant four siloes with four entirely different processes for accomplishing one goal. Eliminating the silo mentality provoked an efficiency boom in the organization, with no drop-off in quality.
Therefore, be brutally honest when eliminating those activities that have outlived their usefulness. By rejecting redundancy, your organization becomes more efficient, and employees will find a greater sense of purpose in their jobs.
Consider the case of the nonprofit that published a special report every 90 days. The data was important to the organization’s mission, but because it took 90 days to compile, by the time the report came out, it contained nothing but old data. As such, the organization’s employees were taking a great deal of time and effort to provide instantly obsolete information.
Today, that organization creates a new report daily, so every morning the nonprofit’s leaders have access to the latest data. But it wasn’t magic that turned 90 days of labour into a few hours of work. It was automation.
There are certain tasks where the human touch is essential and cannot be replaced. For the other tasks, however, automation can speed up processes and eradicate tedious work. Nonprofits should embrace technological solutions as much as possible to automate their processes.
Standardizing processes and adding controls for critical data will help nonprofits support their members and donors. Speed to insights is essential. Nonprofits need to align their data strategy, governance, centralization and self-service initiatives to achieve innovative data maturity.
Data inputs, advanced calculations, information consolidation—all of these and more are functions that can be automated. Changing manual tasks into automated procedures will increase data accuracy, enhance the ability of leaders to make informed decisions and allow staff members to focus more on their core jobs.
Enterprise resource planning (ERP) systems, customer relationship management (CRM) systems and association management systems (AMS) can help nonprofits take advantage of the latest technological options, saving a tremendous amount of human effort and personnel costs. Whatever technology an organization adopts, it needs to optimize the system to its own unique needs.
It’s not just about having the latest and greatest systems. It’s about using those systems to the best of the nonprofit’s ability. The goal is for staff members to view repetitive, boring tasks as a thing of the past, letting the machines take over.
While your staff members may be great at fulfilling the missions of your nonprofit, they probably aren’t experts at converting a database to the cloud or troubleshooting tech issues. And they don’t have to be.
Outsourcing your information technology can free your staff members from moonlighting as “accidental techies” (as they are affectionately known in the nonprofit world), while enhancing the effectiveness of your IT platform. A managed services provider (MSP) can offer experienced professionals who are knowledgeable about the latest tech developments. Outsourced IT advisors can often solve problems faster than nonprofit staff who are not as well-versed in IT. And more important, these professionals can suggest upgrades, monitor cyberthreats and utilize advanced features that minimize the chances of those problems occurring in the first place.
IT is the most common function that nonprofits outsource, but there are other areas in which an MSP can be invaluable. Many providers offer finance and accounting outsourcing (FAO), in which experienced professionals handle the nonprofit’s books, provide enhanced financial reporting and look for the best ways to maintain the organization’s finances. Some nonprofit organizations also outsource parts of their human resource departments, streamlining their HR functions.
A premier MSP offers not just plug-and-play solutions, but actively engages with the nonprofit’s brain trust to transform the organization. In such cases, a nonprofit can work with an interim chief financial officer or chief information officer to hone its overall approach.
Whether the nonprofit adopts IT, FAO, HR or strategic outsourcing, the MSP’s professionals will typically offer advanced tools and present best practices that they have learned by working with other clients. Another key benefit of working with an MSP is the ability to scale up or down at each level of expertise, depending on the organization’s needs. For such reasons, outsourcing has the potential to create a tremendous return on investment for the nonprofit.
Your nonprofit does something better than any other organization, which is why donors make contributions, sponsors sign up and staff members work so hard. But the final key to increasing your impact is to aim higher than maintaining those standards. The goal is to enhance, refocus and double down on your differentiators.
Of course, by virtue of eliminating, automating and outsourcing where possible, the tasks that remain are essential by default. As such, these are the core critical elements of your nonprofit, and you can achieve optimal efficiency by devoting more resources to those mission-specific activities.
Consider the time and money your organization has saved, and invest those newfound reserves into driving your mission forward. Keep in mind that with improved systems now in place, your nonprofit will have better data, smoother workflows and more energized employees to tackle challenges.
Good governance and insightful analytics build trust within your organization. To maintain effective communication, partner with the different areas of your nonprofit to understand the downstream and upstream impact of changes in your data and reporting demand. Align your data and reporting strategy with your team’s key data elements to produce quality analytics.
At this stage, it’s not about making fundamental changes or altering your procedures. Rather, it is about honouring your nonprofit’s vision. Enhancing your nonprofit means being open to new ideas while maintaining a strong focus on achieving your organization’s objectives.
In sum, nonprofits can eliminate, automate, outsource and enhance their way to improved operational efficiency. Doing so greatly increases the odds that they will make a significant impact and continue to fulfill their missions.
Call us at 1-855-206-5697 or fill out the form below and we’ll contact you to discuss your specific situation.
This article was written by Matt Haggerty, Joy Cruz, Morgan Diestler, Jacob Petraitis and originally appeared on Jul 14, 2022 RSM Canada, and is available online at https://rsmcanada.com/insights/industries/nonprofit/increasing-a-nonprofits-impact-through-operational-efficiency.html.
RSM Canada Alliance provides its members with access to resources of RSM Canada Operations ULC, RSM Canada LLP and certain of their affiliates (“RSM Canada”). RSM Canada Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM Canada. RSM Canada LLP is the Canadian member firm of RSM International, a global network of independent audit, tax and consulting firms. Members of RSM Canada Alliance have access to RSM International resources through RSM Canada but are not member firms of RSM International. Visit rsmcanada.com/aboutus for more information regarding RSM Canada and RSM International. The RSM trademark is used under license by RSM Canada. RSM Canada Alliance products and services are proprietary to RSM Canada.
Virtus Group is a proud member of the RSM Canada Alliance, a premier affiliation of independent accounting and consulting firms across North America. RSM Canada Alliance provides our firm with access to resources of RSM, the leading provider of audit, tax and consulting services focused on the middle market. RSM Canada LLP is a licensed CPA firm and the Canadian member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries. Our membership in RSM Canada Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources. For more information on how the Virtus Group can assist you, please call us at 855-206-5697. |
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]]>The post Electronic Financial Records: Maintaining data integrity appeared first on Virtus Group.
]]>NOTE: This article was written for and first appeared in the December 2021 issue of The Advocate, produced by the Saskatchewan Trial Lawyers Association
Maintenance of electronic financial records is not a new concept, but the last two years have pushed many companies and organizations to convert paper driven processes to an electronic format. Regardless of the method used to maintain financial and other records, the principles of strong internal controls, appropriate oversight and sufficient documentation should still apply.
In establishing an electronic record keeping system, consideration should be given to what type of information will be maintained, how long it will need to be accessible, the volume of information as well as which employees should be accessing what information. Privacy legislation and confidentiality may impact how some information is stored and secured.
Canada Revenue Agency requires that business records be maintained for a minimum of six years, which includes electronic records, which must be in an electronically readable format. This is an important consideration when changing software platforms to ensure that there is an appropriate archive of your data to meet these requirements.
Engaging an IT professional may be prudent to assist with software selection, network design and advice regarding the security of the overall platform. Unfortunately, cyber security threats continue to be an issue for many companies and organizations and the methods of attack are always evolving. Ensuring that you have an employee or an external advisor with the knowledge to protect your electronic data and ensure that the security protocols are current is a key control.
Accounting software has been available for many years, with many products now offering cloud based services. Cloud based accounting records allows any authorized employee to access the information and process transactions from any location, as long as an internet connection is available.
Companies can provide access to the records on an as needed basis to accountants or other advisors on a “read only” basis, which reduces risks associated with sending data through email or storage devices. When evaluating a cloud based accounting software, some considerations include:
One of the most important controls is segregation of duties, which is the concept of having at least two people involved with a process to reduce the risk of fraud or error. This particular control can be recreated in an electronic environment by separating tasks or requiring two people to electronically indicate their participation.
Some software may have this as a built in feature, or a separate process may need to be developed. For example, some financial institutions have the ability to require two people to login to approve electronic payments before they are processed, which replaces the dual signature on physical cheques.
Strong internal controls and documentation are important whether your records are paper based or electronic based. Controls over financial transactions should be reviewed on a regular basis to ensure they are effective and operating as intended. As your processes evolve, the affected controls should evolve as well.
Contact our Compliance Team for advice on valuing your client’s business, determining income for support purposes, calculating economic losses, or any other financial analysis you may require. Fill in the form below to get started.
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]]>The post Board Governance: What processes do we need to manage our employees? appeared first on Virtus Group.
]]>Unfortunately, issues may arise that require formal intervention or perhaps the termination of an employee. When these circumstances occur, obtaining legal and professional advice is prudent to ensure that actions taken are appropriate and that the organization’s interests are protected.
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]]>The post Board Governance: What are the best practices around volunteer management? appeared first on Virtus Group.
]]>Some things to think about if you are planning to develop volunteer policies or procedures:
Finally, one key aspect of volunteer management is to consider how you will recognize volunteers for the impact they make on your organization. Ensuring volunteers feel valued and appreciated for the work they do will ensure that they continue to support your organization into the future.
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]]>The post Board Governance: How do we set key performance indicators? appeared first on Virtus Group.
]]>Reporting KPIs in an effective manner is key to allow board members and management to quickly see how the organization is performing. Typically, graphs and charts are easier to understand, especially when all the measures can be shown in a one page snapshot or dashboard. Some organizations use color coding, such a green, yellow and red, to highlight which areas are on target and which are not. For not for profit organizations, KPIs can also be an effective way to externally report back to donors and other stakeholders regarding the outcomes of activities.
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]]>The post Board Governance: What is your role in fraud prevention? appeared first on Virtus Group.
]]>Fraud is the act of deceiving someone or misrepresenting information to obtain personal or financial gain. Fraud occurs in organizations of all sizes, types and purposes, and when it occurs, it can have significant consequences, such as the loss of money or assets, a damaged reputation or uncertainty about future operations.
The Board of Directors has a key responsibility to establish the “tone from the top” through its attitudes, actions and communications. This tone defines the organization’s culture and influences the behaviour of employees, customers, lenders, funders and other stakeholders.
In addition to setting the tone, the Board is responsible to monitor activities and outcomes to ensure they are consistent with policy, strategic plans, budget, etc. If any activities appear to be out of line with expectations, the Board is responsible to follow up and resolve any issues. One of the most important roles of the Board is to be alert and ask questions – if something doesn’t seem accurate or doesn’t make sense, ask more questions until you are satisfied with the answers.
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]]>The post Board Governance: Why is effective budgeting important? appeared first on Virtus Group.
]]>Budgets are a “best guess” plan based on what you know right now and typically prepared on an annual basis. In building the budget, most organizations use the previous year as a starting point and revise figures as needed. Gathering information from everyone who is using the budget can ensure that it is as accurate as possible.
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