Transparency and Accountability

It is important that the Board have in place a system whereby:

  • There is flow of information to the Board that aids decision-making;
  • There is transparency and accountability to external stakeholders; and
  • The integrity of financial statements and other key information is safeguarded.

Appropriate and timely information
Essential to good governance is an effective working relationship between the Chair, Directors, and management. It is critically important that there is a clear understanding and agreement on:

  • Roles and responsibilities;
  • The required mix of Directors;
  • How effectively the Board operates;
  • How effectively the Board interacts with management;
  • The Board’s accountability to its stakeholders; and
  • The Directors’ accountability to one another.

A foundation of a healthy board and management relationship is the content and quality of the information that meets the board’s reasonable expectations. For Directors to fulfil their role and carry out their responsibilities with integrity and ensure appropriate accountability, they need to have current and relevant reports containing information of the type described below.
The “health” and performance of the organisation are critical items for the Board to be focusing on as part of its regular monitoring. It is generally regarded as useful for Boards to have a report from management at each Board meeting that, among other things, gives a good sense of:

  • How the organisation is tracking against its purpose and plans; the financial health of the organisation;
  • Major strategic project reports;
  • Material risk updates; and
  • Any important regulatory, compliance and reporting obligation matters.

The degree of structure and detail relating to such reports will depend on the size, nature and complexity of the NFP’s operations. In relation to “financial health”, Directors of smaller NFPs should expect to see basic items such as expenditure against budget, cash flow projections and a current balance sheet at a minimum. Larger NFPs may require an internal audit function (see below) that works with the board-appointed sub-committee, the audit committee.

Communicating performance against purpose

It is important that the Board have in place a well thought through and clearly articulated purpose that is communicated effectively, both within the organisation and externally.

External financial reporting

Organisations should seek to ensure that their financial standing is sound and that their systems of financial reporting and assurance have integrity.
The level of financial reporting NFPs undertake can vary significantly from organisation to organisation. Some NFPs, particularly larger charities, will prepare full audited financial reports. Other organisations might instead have their reports “reviewed” rather than “audited”. Some may prepare “special purpose” financial reports as opposed to “general purpose” financial reports.

No matter what financial reporting requirements an NFP is subject to, the Board plays a role in helping to ensure the integrity of the financial reports. The Board should accept responsibility for overseeing the integrity and assurance of the organisation’s financial position, performance and reporting.
Activities that Boards might undertake to help promote the integrity of financial reports include:

  • Having an appropriate level of financial literacy at board level;
  • Establishing an audit committee;
  • Establishing an internal audit function; and
  • Drawing on external financial expertise (e.g. voluntary audit or review).

WAPO Contacts

WAPO believes that the strength of a global network of national pituitary patient organizations will lead to improved diagnosis, treatment and care for pituitary and adrenal patients worldwide.