Concentrating authority for the organization’s governance and management practices in one or two people removes valuable checks and balances that help ensure that conflicts of interest and other personal concerns do not take precedence over the best interests of the organization. Some state laws require that the offices of president and treasurer be held by different individuals. Both the board chair and the treasurer should be independent of the chief staff executive to provide appropriate oversight of the executive’s performance and to make fair and impartial judgments about the appropriate compensation of the executive.

• Segregation of duties is a key element in internal controls.
• The chief executive manages the daily operations and the chair leads the board in its governance duties. Unless the board determines it is in the best interests of the organization to have the chief executive serve as board chair, a different person should hold each position. If one person holds both positions, the board should appoint another board member to lead on any issues that require a separation of duties, such as reviewing the compensation of the chief executive.

• Some state laws and bylaws specifically forbid the same person from serving as the president and the treasurer.

1. Every organization needs a system of checks and balances to ensure that the organization’s best interests take precedence. Do we have any individual with multiple roles that may compromise our organization’s system of checks and balances?
2. If our chair carries on the functions of the chief executive, do other board members take on the responsibility for reviewing the chief executive’s performance and potential compensation? 
3. Do we have a plan to separate all the board and staff functions as soon as our organization has the capacity to do so?

1  Laws and Regulations

3  Conflicts of Interest

12 Board Independence