Deck 4: Nonprofit Governing Boards

Question 1

In Grant Thornton's 2012 survey of nonprofit boards, what activity/responsibility was identified as the "most important focus"?

A) Accountability items
B) The organization's reputation
C) Strategic planning
D) Ensuring effective programs

Answer 1

C

Question 2

In 2009, the IRS introduced a revised version of _______ which changed the original form from a financial report into a financial and governance report.

A) Stern v. Lucy Webb Hayes National Training School for Deaconesses and Missionaries
B) intermediate sanctions legislation
C) Form 990
D) the Sarbanes-Oxley Act

Answer 2

C

Question 3

Elected boards are most common in:

A) public organizations.
B) member-serving and advocacy organizations.
C) charitable nonprofits.
D) companies headed by a CEO.

Answer 3

B

Question 4

The concept that is defined as members of the board putting the interests of the organization above their own personal financial interests is called:

A) loyalty.
B) selflessness.
C) care.
D) obedience.

Question 5

The model of organizations that conceives of the board as the top of a hierarchy and the CEO as merely its agent is:

A) the governance-as-leadership model.
B) the policy governance model.
C) purposive-rational model.
D) self-perpetuating model.

Question 6

Excess benefit transaction is:

A) when a person's compensation is deemed in excess of the value of his or her services.
B) the responsibility of a board to make sure an organization is complying with law.
C) how an organization keeps costs of benefits reasonable.
D) a model of board-CEO relationship.

Question 7

Who did Herman and Heimovics find is actually seen as responsible for the organization's success or failure?

A) The board
B) The shareholders
C) The marketing department
D) The CEO

Question 8

No subject commands more ink, or more lung power, than the role of the board in:

A) giving and raising philanthropic funds.
B) administering benefits to its members.
C) maintaining its members' salaries.
D) monitoring its moral responsibilities.

Question 9

This concept states that a board member or officer of the organization cannot unreasonably benefit from the organization's funds.

A) Conflict of interest
B) Private inurement
C) Obedience
D) Intermediate sanctions

Question 10

Establishing the organization mission is the responsibility of its:

A) human resources department.
B) CEO.
C) members.
D) board.

Question 11

The most common type of board in public organizations is a(n):

A) elected board.
B) appointed board.
C) self-perpetuating board.
D) advisory board

Question 12

According to BoardSource, exceptional boards shape and uphold their organization's mission, articulate a compelling vision, and ensure the congruence between:

A) decisions and core values.
B) its direction and its financial goals.
C) the CEO and members of the board.
D) its governance duties and is organizational priorities.

Question 13

When a board is operating in the fiduciary mode, it is concerned with:

A) the organization's long-term directions and goals.
B) specific criteria for monitoring and evaluating the CEO's performance.
C) matters such as stewardship of tangible assets, faithfulness to mission, performance accountably, and obedience to law.
D) creative, out-of-the-box thinking in which visionary leaders often engage.

Question 14

Today's boards are being exhorted not only to raise money and promote the organization but also to:

A) encourage more cooperation between the CEO and the board.
B) be more aggressive in monitoring performance.
C) motivate its members.
D) increase communication levels between the board and the rest of the organization.

Question 15

Financial penalties to punish individuals who engage in or permit improper transgressions are called:

A) give or get policies.
B) intermediate sanctions.
C) excess benefit transactions.
D) means to an end.

Question 16

In 2005, who assembled a panel of experts to identify those practices that lead to effective governance in an organization?

A) The Stanford Social Innovation Review
B) The federal government
C) BoardSource
D) Grant Thornton

Question 17

Chait, Ryan, and Taylor call for the board and the CEO to focus their attention on:

A) the critical issues facing the organization.
B) policies and their implementation.
C) monetary goals.
D) expansion.

Question 18

An ex-officio seat on a board is held by:

A) the individual who holds a certain office or position.
B) a randomly selected individual.
C) the highest ranking officer in the organization.
D) an individual appointed by the most senior member of the board.

Question 19

In a self-perpetuating board, new members are selected by:

A) the membership of the organization.
B) the CEO.
C) the existing members of the board.
D) a selection committee.

Question 20

In Carver's policy governance model, he argues that the board should lead the organization by focusing its attention on establishing:

A) board evaluations.
B) policies.
C) a group of advisors.
D) senior management positions.

Question 21

Hybrid boards may have elected and appointed members.

Question 22

A nonprofit board of directors has hired a consultant to help the directors think of new and creative ways to improve organizational performance. According to Chait, the board is operating in what type of mode?

A) Fiduciary mode
B) Evaluation mode
C) Generative mode
D) Strategic mode

Question 23

Advisory councils have no legal responsibility or authority for governance of a nonprofit organization.

Question 24

The Panel on the Nonprofit Sector issues reports recommending practices similar to those outlined in the Sarbanes-Oxley Act.

Question 25

A nonprofit board of directors asked an outside consulting organization to assess the organization's program performance. The board is applying the best practice of:

A) Strategic thinking
B) Independent-mindedness
C) Results-oriented
D) Revitalization

Question 26

Nonprofits are not required to file a Form 990 with the IRS unless their annual revenues are over $100,000.

Question 27

A board governs the nonprofit organization while the CEO manages it.

Question 28

Chait writes that nonprofit boards should manage the organizations they serve.

Question 29

Governing boards have the ultimate responsibility for ensuring an organization serves its mission.

Question 30

George retired from a local law firm and then volunteered to oversee a nonprofit's legal records. George is performing the duties of a:

A) corporate secretary.
B) corporate clerk.
C) bookkeeper.
D) sergeant-at-arms.

Question 31

A nonprofit board of directors is establishing ground rules that inform members what type of fundraising efforts would not be allowed. The board is setting a policy that Carver would refer to as:

A) board-staff relationships.
B) ends to be achieved.
C) means to be achieved.
D) means to the end.

Question 32

In the study Daring to Lead, researchers found a negative correlation between the amount of time the CEO spends with the board and CEO and board member satisfaction.

Question 33

Self-perpetuating board members are elected by the organization's membership.

Question 34

The board of directors of a nonprofit is debating if a proposed new program is offering falls within the organization's mission. The board is applying which type of duty?

A) The duty of investment
B) The duty of care
C) The duty of loyalty
D) The duty of obedience

Question 35

______________ means that a person is perceived by himself and the board of directors as the organization's formal authority.

A) Social rationalism
B) Purposive-rationality
C) Psychological centrality
D) Emergent perception

Question 36

Robert, the chair of a nonprofit board of directors, asked the CEO to provide the board an accurate report of the expenses incurred for a fundraiser. Robert is practicing which best practice recommended by BoardSource?

A) Strategic thinking
B) Ethos of transparency
C) Continuous learning
D) Revitalization

Question 37

A nonprofit organization's finance committee is listening to the advice of a financial expert on how they should manage the organization's investments. The board is practicing which duty?

A) The duty of investment
B) The duty of care
C) The duty of loyalty
D) The duty of obedience

Question 38

Another name for a nominating committee is a(an):

A) ad hoc committee
B) governance committee
C) naming committee
D) stewardship committee

Question 39

Which type of board-CEO model suggests an organization's strategic plan is simply a paperwork project?

A) Purposive-rational model
B) Psychological Centrality and Board Centered Leadership Model
C) Social-constructionist model
D) Governance as Leadership model

Question 40

An advantage of an elected board is that it helps ensure that the organization will be responsive to member needs.

Question 41

The board responsibility to "obedience" means that the board must do what the CEO asks them to do.

Question 42

Examine the three concepts that the legal responsibilities of a nonprofit board.

Question 43

The Sarbanes-Oxley Act has a provision to protect whistle-blowers.

Question 44

Give an example of a conflict of interest. Express how a well-managed organization might handle such a conflict.

Question 45

Outline the pros and cons of an organization electing its board members. Point out the challenges that a CEO of such an organization might face.

Question 46

Compare and contrast the various types of boards discussed in Chapter 4.

Question 47

Analyze board policies requiring member participation in fundraising.

Question 48

One of the responsibilities of a nonprofit board member is to supervise volunteers.

Question 49

Examine the six behaviors that Herman and Heimovics observed among the effective, board-centered executives they studied. Ascertain if these behaviors were reflected in the boards they studied.

Question 50

Differentiate between the roles of a nonprofit board's chair and board professionals.

Question 51

Draw a diagram of Patricia Bradshow's five board configurations.

Question 52

Examine the provisions of the Sarbanes-Oxley Act that apply to nonprofit organizations.

Question 53

Examine the four areas in Carver's model of policy governance regarding the development and maintenance of policies.