August 9, 2007 | Read Time: 2 minutes
NEW BOOKS
Sarbanes-Oxley for Nonprofit Boards
by Peggy M. Jackson
“Enron, WorldCom, and other corporate scandals may have led to the passage of Sarbanes-Oxley legislation,” writes Peggy M. Jackson, a consultant in risk management, “but clearly the private sector does not have the corner on duplicity.”
Ms. Jackson is referring to scandals in recent years at the Red Cross, United Way, American University, and other nonprofit groups.
She offers advice on how charities can comply with Sarbanes-Oxley principles, which create and enforce standards for greater openness and accountability in business. Ms. Jackson emphasizes that even though charities are not required to follow most of the Sarbanes-Oxley provisions, “the areas covered in this legislation really are practices that should have been in place all along” among nonprofit groups.
Although the technical and legislative jargon included in Sarbanes-Oxley can be daunting, Ms. Jackson interprets what each area of the law means for charities, and discusses practical ways that groups can apply her advice.
She also provides tips on common obstacles facing nonprofit organizations that wish to comply with Sarbanes-Oxley, including dysfunctional board culture and low financial literacy among small charities.
One section provides a questionnaire to analyze “where your board is in terms of Sarbanes-Oxley compliance, adaptation of best practices, and purposeful board culture and performance.”
Once the board completes the quiz — which includes sections on committee structure, oversight, and governance obligations — the organization can create a “road map” toward total compliance with the standards.
The responsibility ultimately comes down to board members, Ms. Jackson writes, which is why charity boards should make every effort to follow Sarbanes-Oxley legislation.
“Boards need to revisit their governance and oversight responsibilities because they will now be held accountable by federal and state authorities for the management and operation of the nonprofit,” she writes.
Nine appendices include a sample copy of a whistle-blower protection policy, information on conflict of interest and board orientation, and a bibliography.
Publisher: John Wiley & Sons, 111 River Street, Fourth Floor, Hoboken, N.J. 07030; (201) 748-6000; fax (201) 748-6088; http://www.wiley.com; 194 pages; $45; ISBN 0-471-79037-0.
