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What is a Finance Committee?

___You use a standing committee, which may include both members and non-members of your board, to oversee your organization's financial operation.

Why do you need a Finance Committee?

You establish a Finance Committee because:

___A Finance Committee helps a board fulfill its fiduciary responsibility.

___A Finance Committee can protect the organization from legal challenges and liability.

___An alert and informed committee should be able to catch both intentional and unintentional mismanagement of funds.

___A Finance Committee can protect the organization from actual or apparent conflict of interest.

___A Finance Committee acts as the board's eyes and ears in the financial operation.

___A Finance Committee can act as an advisory panel to the financial operation.

___A Finance Committee can evaluate both the financial operation and the people in charge of it from a position of knowledge.

___A Finance Committee can be helpful in the hiring of fiscal staff or a new director.

___A Finance Committee can make the audit easier.

___A Finance Committee can interpret the audit for the rest of the board.

___A Finance Committee can be helpful in recommending the hiring, retention, or firing of potential or current auditors.

Who should be involved in a Finance Committee?

___You recruit board members who have a financial background, and who want to serve on the committee - CPA's, lawyers, financial analysts, bankers, etc.

___You recruit non-board members who would be valuable to the committee and with whom your board can benefit by establishing relations.

___You recruit board members who are financially less sophisticated, and who might therefore represent the board at large, and ask the kinds of questions they might ask.

___You recruit people who, by their known integrity and community standing, can lend credibility to the committee.