NAFC Board of Directors
Governing Policies Manual
i
Governing Policies of the NAFC Board of Directors
Table of Contents
Introduction
Category I: Ends / Priority Results
1.0 Broadest Ends/Mission Statement – Medically Underserved Access to Healthcare
1.1 Medically Underserved have Information to Attain Healthcare
1.2 Public Policy, Regulations and Legislation
1.3 Free and Charitable Clinics Have Resources
1.4 Public Awareness and Support of the Medically Underserved
1.5 A Recognized Standard of Excellence for Free and Charitable Clinics
1.6 There are resources available to Free and Charitable Clinics and Pharmacies focused on diversity,
equity and inclusion.
Category II: Board Process
2.0 Governance Purpose/Commitment
2.1 Governing Philosophy and Values
2.2 Board Job Products
2.3 Board Work Plan and Agenda Preparation
2.4 Board Chair’s Role and Authority
2.5 Board Members’ Code of Conduct
2.6 Board Members’ Individual Responsibilities
2.7 Board Committee Principles
2.8 Board Committee Structure
2.9 Board Size, Nominations, Elections and Term Limits
2.10 Budgeting for Board Prerogatives
2.11 Investment Policy
Category III: Management Parameters
3.0 General Management Constraint
3.1 Treatment of Members
3.2 Treatment of Staff
3.3 Financial Condition and Activities
3.4 Asset Protection
3.5 Financial Planning and Budgeting
3.6 Compensation and Benefits
3.7 Emergency CEO Succession
3.8 Board Awareness and Support
Category IV: Board-Management Delegation
4.0 Board/Management Connection
4.1 Unity of Control
4.2 Accountability of the CEO
4.3 Delegation to the CEO
4.4 Monitoring CEO Performance
Governing Policies of the NAFC Board of Directors
Introduction
This Governing Policies Manual contains the current standing (ongoing) performance standards, values and
expectations of the Board of Directors of the National Association of Free and Charitable Clinics (“NAFC”).
1. Purpose: This Manual is designed to help the Board approach decisions from the perspective of its own,
previously established standards, values and expectations by:
A. Elevating efficiency of having all ongoing Board policies in one place.
B. Quickly orienting new Board members to current policies.
C. Eliminating redundant or conflicting policies.
D. Having greater ease of reviewing current policy when considering new issues.
E. Providing clear, proactive policies to guide the Executive Director (CEO) and staff, as well as Board
officers, members and committees.
2. Consistency: The Board will ensure that each policy in this document is consistent with the law, the
Articles of Incorporation and the Bylaws, all of which have precedence over these Board policies. Except for
time-limited or procedural-only Board decisions (approving minutes, electing officers, etc.), which are
recorded in Board meeting minutes, all standing Board policies shall be included or referred to in this
document. The CEO is responsible for developing operational and administrative policies and procedures
that are consistent with the standards set forth in this Manual.
3. Transition: Unless a prior Board resolution or contract obligates the organization with regard to a specific
matter, these updated standards supersede previous Board resolutions. If an actual or apparent conflict
arises between this Manual and other policies or Board resolutions, the matter shall be brought to the
Board’s attention for resolution.
4. Changes: The Board will regularly review these policies and, as appropriate, refine them. Proposed
revisions may be submitted for Board consideration by any Board member, or by the CEO. Whenever
changes are adopted, the updated document should be dated and promptly disseminated to the Board and
CEO.
5. Specificity: Each new policy will be drafted to fit into the appropriate section of the Manual. For
consistency, policies should be drafted starting with the broadest policy statement, then adding specificity
down to the level of detail that the Board finds appropriate/necessary for Board action. The Board will afford
discretion for implementation (allowing reasonable interpretation) when delegating further decisions to the
Board Chair, Board Committees or the CEO.
Governing Policies of the NAFC Board of Directors
Policy 1.0 Ends/Priority Results
Date of adoption / Last revision: December 2022
NAFC VISION STATEMENT
A just society that ensures a healthy life and well-being for all.
1.0 Broadest Ends/Mission Statement:
NAFC mission:
Building healthy communities for all through quality, equitable, accessible healthcare.
(with results optimizing use of available resources)
Priority Results (not reflecting any order of priority)
1.1 The medically underserved have information to attain quality healthcare
1.2 Public policy, regulations and legislation effectively address the needs of the medically
underserved.
1.3 Free and Charitable Clinics have resources that increase their capacity to serve those with
unmet healthcare needs.
1.4 There is growth in public awareness and support of the medically underserved, and the
critical role of Free and Charitable Clinics.
1.5. There is a recognized standard of excellence for Free and Charitable Clinics.
1.6 There are resources available to Free and Charitable Clinics and Pharmacies focused on
diversity, equity and inclusion.
Governing Policies of the NAFC Board of Directors
Policy 2.0 Governance Purpose
Date of adoption / Last revision: December, 2021
The purpose of the Board of Directors, on behalf of those with unmet healthcare needs and those who serve them
(the “owners”) is to ensure that NAFC:
1. Achieves appropriate results for or on behalf of the “owners” (as specified in Board Ends policies) at an
optimal cost and
2. Avoids unacceptable actions and situations.
Governing Policies of the NAFC Board of Directors
Policy 2.1 Governing Philosophy and Values
Date of adoption / Last revision: December, 2021
The Board will govern lawfully, using Policy Governance®
1
principles, with an emphasis on: (a)
integrity and truthfulness in all of its activities and practices, (b) outward vision, (c) encouragement of diversity in
viewpoints, (d) strategic leadership more than administrative detail, (e) clear distinction of Board and staff roles, (f)
collective decisions, and (g) a focus on the future.
Accordingly:
1. The Board will cultivate a sense of group responsibility. The Board, not the staff, is responsible for Board
performance. The Board will lead NAFC by proactively setting clear performance expectations for its own
work and for the operating organization.
2. The Board will use its members’ expertise to enhance its understanding of issues, but will not simply defer
to that expertise as the judgment of the entire Board.
3. The Board will set performance standards and expectations for NAFC through the careful articulation of
written policies. The Board’s primary focus will be on the achievement of intended long-term impacts for and
on behalf of the owners, not on the administrative/operational means of attaining those results.
4. The Board will establish and adhere to its own performance expectations pertaining to matters such as
attendance, ethical conduct, meeting preparation and participation, policy-making, respect of roles,
speaking to management, the membership and the public with one voice, and continually building the
Board’s governance capability and reputation.
A. Continual Board development will include periodic assessment of its own performance, and orientation
of new Board members, upon/before their election in the Board’s governance process and these
policies.
B. Orientation for new Board members will include three primary components:
i. Governance process: The Board Chair will ensure provision of training including the governance
principles underlying this document, and review of NAFC’s Bylaws and these policies, with
particular emphasis on the Board Members’ Code of Conduct policy.
ii. Current strategic issues: The Board Chair and the CEO will provide overview and background
information on significant issues being addressed and likely to be decided upon early in new Board
member’s tenure.
iii. Operational overview: The CEO will help new Board members achieve a general understanding of
the operating organization (finances, key personnel, key products/programs/services, FAQs, etc.).
5. Although the Board may change these governing policies at any time, it will diligently observe those
currently in effect.
6. All on-going policies of the Board are contained in this document, and they remain in effect, unless
amended or deleted by Board action.
7. The Board will be accountable to the owners for competent, conscientious and effective fulfillment of its
governance obligations. The Board will not allow any officer, Board member, Board Committee or other
individual to be an obstacle to this commitment.
8. The Board will regularly evaluate and improve its performance. Self-assessment will compare Board activity
and discipline to the standards set forth in these Board Process and Board-Management Delegation
policies.
9. The Board’s activities will be open and accessible to reasonable scrutiny by the owners, with the exception
of personnel or other matters of a sensitive nature.
10. The Board will not allow the organization, in its hiring and other activities, to discriminate on the basis of
race, creed, national origin, religion, age, disability, political affiliation, sex, sexual orientation, gender
identity or marital, parental or military status.
1
Policy Governance® is a registered service mark of Dr. John Carver, representing an integrated set of governance principles that provide for systematic role clarity and organizational
accountability. Authoritative website: www.policygovernance.com
Governing Policies of the NAFC Board of Directors
Policy 2.1 Governing Philosophy and Values, continued
Date of adoption / Last revision: May 2015
11. The Board is committed to the following values and guiding principles:
A. WE BELIEVE access to health care should be a right, not a privilege.
B. WE VALUE human dignity, and access to quality, compassionate and culturally competent health care.
C. WE VALUE the individuality of our member clinics and other safety net organizations, and their ability to
adapt to community needs and resources.
D. WE VALUE volunteerism.
E. WE VALUE community ownership, service and collaboration.
Governing Policies of the NAFC Board of Directors
Policy 2.2 Board Job Products
Date of adoption / Last revision: December, 2021
On behalf of those with unmet healthcare needs and those who serve them (“owners”), the Board’s job is to
define and ensure appropriate organizational performance. To fulfill this role, the Board takes direct responsibility
for three specific job products unique to its trusteeship role and necessary for proper governance and
management:
1. Linkage: The Board will connect the interests of the owners with operational performance.
A. Needs Assessment: As it acts on behalf of owners in the governance of NAFC, the Board will assess
needs and trends affecting them as they relate to NAFC’s activities and scope of influence, and will
develop and maintain Ends policies identifying and prioritizing intended organizational outcomes to
address those needs.
B. Advocacy: The Board will advocate for NAFC, conveying to owners, as feasible, the Association’s
achievements on their behalf and of its intended future results.
2. Performance Standards: The Board will maintain written performance standards, as set forth in these
governing policies, addressing the broadest, and as appropriate, more defined levels all organizational
decisions and situations.
A. Ends: Strategic results priorities describing intended organizational impacts, benefits, outcomes,
recipients and their relative worth (what results, for which recipients, at what cost/priority).
B. Management Parameters: Constraints on executive authority defining the boundaries of prudence and
ethics within which all management activity and decisions must take place.
C. Board Process: Specification of how the Board defines, carries out and assesses its own work.
D. Board-Management Delegation: How the Board delegates authority to management, and ensures its
proper use; the CEO role, authority and accountability.
3. Assurance of Organizational Performance: The Board will ensure Ends fulfillment, financial solvency
and organizational integrity by holding itself accountable for effective governance as defined in these
policies, and holding the CEO accountable for successful achievement of Ends and adherence to
Management Parameters.
In addition, the Board maintains direct responsibility for:
4. Pursuant to the Bylaws, determinations regarding classes of membership and their respective dues
structure.
5. Determinations regarding NAFC’s Public Policy Agenda (positions on/endorsements of public policy,
regulatory and legislative issues) upon which staff advocacy initiatives are to be based, as appropriate in
serving the interests of those with unmet healthcare needs and those who serve them.
6. Decisions outside the boundaries of authority delegated to the CEO (as proscribed in Management
Parameters policies).
7. Decisions pertaining to initiating legal action.
Governing Policies of the NAFC Board of Directors
Policy 2.3 Board Work Plan and Agenda Preparation
Date of adoption / Last revision: December, 2021
To fulfill its role, the Board will prepare and follow an annual work plan that: (1) re-explores Ends policies and (2)
continually improves Board performance through Board education, and interactions with staff, customers,
members, beneficiaries, and outside experts.
Accordingly:
1. Annual Cycle: The Board’s annual planning cycle will conclude each year by October 30
th
, so that
administrative planning and budgeting for the next fiscal year can be focused on addressing both long and
short-term Ends.
2. Work Plan Development: The cycle will start at the Board meeting held in conjunction with the Summit
each October, when the Board will begin developing its work plan for the next year. At that time, the Chair
will prepare and present for the Board’s consideration and approval a suggested work plan for the following
year’s meetings. Considerations should include:
A. Board Education: Identification of topics that will elevate the Board’s understanding, primarily of
external issues and trends that impact Ends, and to a lesser extent key areas of operations.
B. Orientation/Training for New Board Members: Per policy 2.1.4, to include review of NAFC’s
governance system and documents, overview of key strategic issues to be addressed early in new
Board members’ tenure, and an operational overview.
C. Ownership/Membership Linkage: How the Board will connect with segments of the ownership (e.g.
through surveys, focus groups, and other methods of gaining relevant input) in the coming year.
D. Policy Review: How the Board will systematically review its policies, with emphasis on Ends on a
periodic basis (e.g., by priority, by topic, or by an emphasis of the Board’s choosing).
E. Assessment/Evaluation of CEO Performance: Reviewing the schedule of planned monitoring
activities to assure performance on Ends and Management Parameters policies.
F. Self-Assessment: Methods and timeline for periodic evaluation of how well the Board is fulfilling its
role (i.e., in accordance with its Board Process and Board-Management Delegation policies) and open
discussion of how the Board’s performance can be improved.
G. Meeting Schedule: Establishment of the meeting schedule for the coming year to maximize Board
member attendance and participation.
H. Social Engagement: To build its effectiveness as a leadership tam, the Board will schedule periodic
social activities.
3. Meeting Agendas: The Chair will determine the agenda for any particular meeting, although Board
members and the CEO may request or recommend any appropriate matters for Board consideration.
A. A Board member or the CEO may recommend or request a matter for Board discussion by submitting
the item to the Chair at least ten days prior to the regularly scheduled Board meeting.
B. To ensure Board member preparation and informed participation, meeting agendas and packets
(background materials for decision items on the agenda, monitoring reports, etc.) are to be received by
Board members at least seven days prior to the scheduled Board meeting.
C. By an affirmative vote of a majority of those present, additional matters may be added to the agenda of
any regular Board meeting.
4. Consent Agenda: “Required Approvals” will appear on a Consent Agenda, in which one motion can
address those items delegated to the CEO yet required by law or third party to be Board-approved.
A. To use Board meeting time as efficiently as possible, the CEO is expected to provide substantiation that
all Consent Agenda items comply with relevant Board policies.
B. Items may be removed from Consent Agenda for discussion upon majority vote of the Board.
Governing Policies of the NAFC Board of Directors
Policy 2.3 Board Work Plan and Agenda Preparation, continued
Date of adoption / Last revision: December, 2021
5. Executive Director Monitoring: The Board will act on the CEO’s monitoring reports received
prior to each meeting, determining by majority vote whether the respective report:
A. Conveys a reasonable interpretation of the respective policy.
B. Provides reasonable substantiation of compliance with the policy, as interpreted.
6. CEO Annual Compensation Review: Each year at the October meeting, the Board will summarize and
review its judgments of monitoring activities (monitoring reports, audits, etc.) received during the last year
and will determine any adjustments to the Executive Director’s compensation and benefits, to be effective
January 1
st
.
Governing Policies of the NAFC Board of Directors
Policy 2.4 Board Chair’s Role and Authority
Date of adoption / Last revision: December, 2021
As NAFC’s chief governance officer, the Chair’s primary role is to ensure the integrity of the Board’s
process, and secondarily to represent the Board to outside parties.
Accordingly:
1. The Chair’s job is to ensure that the Board acts in a manner consistent with its policies and any
requirements legitimately imposed upon it from outside the organization.
A. Agenda content will include only those issues that clearly (according to Board policy) belong to the
Board to decide, consider, or monitor, or to otherwise educate the Board for informed fulfillment of its
responsibilities.
B. Deliberation will be fair, open, thorough, timely, orderly, and kept to the point.
2. The Chair will lead and participate in the Board’s assessment of its own performance.
A. Criteria for assessment will be the Board’s adherence to its Board Process and Board-Management
Delegation policies.
B. The Board will self-assess its overall performance no less frequently than once per year.
C. The Board will ensure that there is at least a brief assessment of each face-to-face meeting prior to
adjournment, identifying factors that enhanced its productivity, as well as those that would have made
the meeting more successful.
3. The Chair is authorized to make decisions consistent with the Board Process and Board-Management
Delegation policies, with the exception of (a) employment/termination of the CEO, or (b) decisions
pertaining to matters about which the Board has delegated specific authority to others. The Chair may use
any reasonable interpretation of these policies.
A. The Chair is empowered to preside at Board meetings with the commonly accepted power of that
position, such as ruling and recognizing.
B. The Chair has no authority to make decisions within the Board’s Ends and Management Parameters
policy areas. Therefore, as the CEO is accountable to the Board as a whole, the Chair does not have
authority to supervise or direct the CEO.
C. The Chair may represent the Board to outside parties in announcing Board-stated positions, and in
stating decisions and interpretations within the area delegated to him or her.
i. The Chair may delegate this authority but remains accountable for its use.
D. Except where specified otherwise in Bylaws or Board Policies, the Chair may appoint Board members,
or others, as appropriate, to serve on Board Committees.
Governing Policies of the NAFC Board of Directors
Policy 2.5 Board Members’ Code of Conduct
Date of adoption / Last revision: December, 2021
The Board expects of itself and its members ethical, professional and lawful conduct, including proper
use of authority and appropriate decorum when acting as Board members.
Accordingly:
Duty of Care: Board members are to discharge their duties honestly and in good faith. Board members
shall exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in
similar circumstances.
Duty of Obedience: Board members must abide by NAFC’s governing documents (i.e. Articles of
Incorporation, Bylaws and these Governing Policies). While vigorous debate is expected and encouraged,
Board members are obliged to support the legitimacy and authority of the final determination of the Board
on any matter, irrespective of the member’s personal position on the issue.
Duty of Loyalty: Board members must demonstrate loyalty to the interests of the NAFC and its “owners”
(those with unmet healthcare needs and those who serve them, superseding any conflicting loyalties such
as that to singular segments of the ownership, family members, advocacy or interest groups, staff, other
organizations, or any personal interests as a consumer of NAFC’s services. Board members may not use
any information provided by the Association or acquired as a consequence of the Board member’s service
to the Association in any manner other than in furtherance of his or her Board duties.
Board members must avoid any conflict of interest with respect to their fiduciary responsibility.
A. There must be no self-dealing, or procurement by NAFC of any Board member’s business or personal
services except as procedurally controlled to assure openness, competitive opportunity and equal
access to inside information.
B. When the Board is to decide an issue about which a member has an actual or potential conflict of
interest, that member shall disclose the conflict to the Board and absent herself or himself without
comment from not only the vote, but also from the deliberation.
i. A conflicting interest exists when a Board member or a related party has a beneficial financial
interest in the transaction of sufficient significance that it would reasonably be expected to exert an
influence on that Board member’s judgment if he or she were called upon to vote on the matter.
Related parties include the Board member’s spouse/significant other, parents, children, siblings,
siblings of the parent or spouse, and all other persons or entities in which the Director has an
interest, partner, agent, or employee, or exerts control or influence, either directly or indirectly.
ii. In case of a dispute regarding the existence of a real or perceived conflict of interest, the Board
shall consider whether a conflict is present, and the vote of the disinterested members of the Board
shall be final. The individual with the potential conflict of interest shall not vote.
iii. Board members must not exert undue influence to obtain staff employment for themselves, family
members or other individuals. Should a Board member apply for staff employment, he or she must
first resign from the Board.
Board members must not attempt to exercise individual authority over the organization.
A. Board members’ interactions with the CEO or with staff must recognize the lack of authority vested in
individuals except when explicitly stipulated by the Board.
B. Board members’ interaction with the media, public or other entities must recognize that Board members
are not to speak for the CEO or for the Board, except to repeat explicitly stated Board decisions.
C. Board members will not publicly express individual judgments of the performance of the CEO or of
other employees, other than when participating in the Board’s monitoring functions.
Board members will treat one another, staff members, and all other NAFC constituents with respect, civility
and transparency.
Board members must respect the confidentiality appropriate to issues of a sensitive nature. Such
confidentiality is to be maintained after conclusion of a Board member’s term.
Governing Policies of the NAFC Board of Directors
Policy 2.5 Board Members’ Code of Conduct, continued
Date of adoption / Last revision: December, 2021
All Board members are required to, upon election and annually thereafter, complete and submit
to the Secretary of the corporation a written statement affirming they have received, reviewed and
understand these Governing Policies, with particular reference to this Board Members’ Code of Conduct
policy, and its Conflict of Interest provisions. Board members shall disclose their involvements and interests
that could give rise to a conflict of interest including, but not limited to their involvement or those of family
members, as directors or officers of other organizations with vendors or other affiliations with other entities
that might reasonably be perceived as a conflict. Board members will promptly update their disclosures if,
during the year, a material change in circumstances should occur.
A Board member aware of credible information that suggests that a Board policy has been violated, by the
Board, a Board member or the CEO, has an affirmative obligation to bring the concern to the Board Chair. If
the Chair is the subject of the concern, it should be brought to the Vice-Chair.
If a Board member is alleged to have violated this Code of Conduct:
A. The Chair (or Vice-Chair, if the Chair is the subject of the concern) will have an informal discussion with
the individual whose action(s) are questioned. If this is not successful in resolving the concern, then:
B. The Chair will put the issue on the agenda for closed session. The respondent Board member will be
allowed to present his or her views prior to the Board determining whether or not the action violated this
Code of Conduct.
C. A Board Member found by the Board (by majority vote) to have violated this Code of Conduct may be
subject to subsequent censure or other Board action, as long as consistent with the Bylaws and
applicable statutes.
Governing Policies of the NAFC Board of Directors
Policy 2.6 Board Members’ Individual Responsibilities
Date of adoption / Last revision: December, 2021
Board member engagement and participation is integral to the Board’s leadership success. Therefore,
each Board member is expected to fulfill the following responsibilities:
1. Commitment: Board members are expected to, upon appointment to the Board and annually, sign a Letter
of Commitment indicating that they have reviewed and commit to abide by NAFC’s Bylaws and these
Governing Policies, including Code of Conduct and Conflict of Interest provisions, as may be amended from
time to time.
2. Attendance: Board members are expected to attend Board meetings on a regular and punctual basis.
Absence from more than one-third (33.3%) of the Board’s regularly scheduled meetings in any calendar
year will constitute that member’s resignation from the Board.
A. In case of extenuating circumstances, a Board member subject to removal may request a waiver to this
provision. Waivers may be granted only by vote of the Board.
3. Preparation and Participation: Board members are expected to review agenda materials in advance of
Board and committee meetings and to participate productively in discussions.
4. Ambassadorship: Board members are expected to be alert to member and constituent concerns that can
be addressed through NAFC’s mission and Ends, to help communicate and promote NAFC to members,
prospective members and other constituents, and to support NAFC’s public policy agenda.
5. Responsiveness: Board members are expected to be attentive to Board communications and respond
promptly to staff and Board member requests for feedback or assistance.
6. Members as Individuals: The CEO is accountable to the Board as a whole and not to individual Board
members. Therefore, the relationship between the CEO and individual members of the Board, including the
Chair, is collegial and not hierarchical.
7. Volunteerism: Board members may volunteer as individuals in operational capacities. In such situations,
they are subject to the direct supervision of the CEO or responsible staff person.
8. Members in Good Standing: Board members are expected to ensure their NAFC membership, as
applicable, (or that of the entity for which they serve as officer, director, employee, or owner) remains in
good standing.
9. Professional Standing: A board member who has professional or personal circumstances that jeopardize
the reputation of the NAFC will put the interests of NAFC ahead of their own, and offer to take a leave of
absence, or resignation, as may be appropriate due to the circumstances.
10. Contributions: Each Board member is expected and required to make an annual personal financial
contribution as a tangible demonstration of their commitment to the organization. Board members are
expected to contribute at a level that is personally meaningful, and to ask others to join them in contributing
to NAFC.
11. Participation in Organizational Activities:
A. In addition to Board meetings, Board members are expected to:
i. Attend the annual Summit.
ii. Serve on at least one Board Committee.
B. Board members are also encouraged to:
i. Support/participate in NAFC’s legislative advocacy activities.
Governing Policies of the NAFC Board of Directors
Policy 2.7 Board Committee Principles
Date of adoption / Last revision: December, 2021
The Board may establish Board committees to help it be more effective and/or efficient in its work. Board
committees are not to interfere with the Board’s delegation of authority to the CEO, or the CEO’s to other staff.
Accordingly:
1. Board committees are established to help the Board do its job, not to help, advise or exercise authority over
staff.
2. Board committees will ordinarily undertake activities not delegated to the CEO, such as by preparing policy
alternatives and implications for Board consideration, or performing specific monitoring functions.
3. Board committees may only speak or act for the Board when formally given such authority for specific
and/or time-limited purposes. The Board will carefully state expectations for and authority of each
committee (in the Board Committee Structure policy) in order not to conflict with authority delegated to the
CEO.
4. As the CEO works for the full Board, he or she will not be required to seek approval of a Board committee
before an executive action.
5. The number and purpose of Board committees is to be evaluated annually to assure continuity and
relevance.
6. This policy applies to any group formed by Board action, whether or not it is called a committee and
regardless of whether it includes Board members. This policy does not apply to (“operating”) committees
formed under the authority of the CEO.
7. Unless specifically authorized by the Board, a Board Committee may not make any commitment of
organizational resources or funds.
Governing Policies of the NAFC Board of Directors
Policy 2.8 Board Committee Structure
Date of adoption / Last revision: December, 2021
Board committees are those established by and with authority emanating from the Board, regardless of
whether composition includes non-Board members. The only Board committees are those set forth below. Unless
otherwise specified, the CEO, or his/her staff designee, will serve as a resource (non-voting member) for each
Board committee.
1. NOMINATING COMMITTEE –
A. Deliverable #1: Fulfillment of the nominations process as outlined in the Bylaws and Governing
Policies, resulting in a properly screened slate of potential Board members, recommended to the Board
no later than October 31
st
of each year.
Deliverable #2: A proposed slate of officers recommended to the Board for action at its December
Board meeting.
Deliverable #3: As directed by the Board, or requested by the Chair, preparation and/or review of
proposed policy or Bylaws revisions, and recommendations for Board consideration.
Deliverable #4: Thorough orientation and training of new Board members.
Deliverable #5: Recommendations for Board consideration regarding additional Board
training/development opportunities to enhance the Board’s governance skills and capabilities.
Deliverable #6: Development of plans/mechanisms for active linkage between the Board and the
membership and other segments of ownership, ensuring the Board is well informed of the perspectives
of and issues faced by distinct segments of the ownership, and that they are informed of the Board’s
work on their behalf.
B. Authority: To incur costs of up to $0 in direct charges and management time as needed.
C. Composition: Four (4) members elected annually by the Board at its January/February meeting. The
Immediate Past Chair, if still serving as a voting director, shall be one of the Committee members, and
its chairperson. Committee members will be selected from those who are not currently eligible for or
seeking re-nomination.
2. PUBLIC POLICY COMMITTEE
A. Deliverable #1: Development of proposed Legislative, Regulatory and Policy Agenda for Board
consideration and adoption. To be presented to the Board each year for action at its October meeting.
B. Authority: To incur costs of up to $15,000 in direct charges and management time as needed.
C. Composition: List composition structure here: 7-12 members, including a committee chairperson, and
including at least 3 Board members, and 2 representatives from state associations, appointed by the
Board each year at the January/February meeting. Emphasis to be given to broad geographic
representation/participation.
Governing Policies of the NAFC Board of Directors
Policy 2.8 Board Committee Structure, continued
3. EXECUTIVE COMPENSATION COMMITTEE
A. Deliverable #1: Recommendations for Board consideration regarding adjustments to the CEO
compensation and benefits package. To be presented to the Board in a timely manner to allow final
action to be taken by the October meeting each year.
Deliverable #2: Accompanying the recommendations, provide data as to comparable compensation for
similarly qualified persons in comparable positions.
Deliverable #3: Contemporaneous documentation and recordkeeping with respect to the deliberations
and decisions regarding CEO compensation.
B. Authority: To incur costs of up to $250 in direct charges (e.g. for published salary surveys, legal
services to develop/amend Employment Agreement, etc. management time as needed.
C. Composition: Three Board members, including a chairperson, appointed by the Board at its
January/February meeting each year.
4. AUDIT/INVESTMENT COMMITTEE
A. Deliverable #1: Confirmation of auditor’s independence and recommendation to Board for engagement
of auditor by no later than end of August each year.
Deliverable #2: Annual specification of audit scope, consistent with Board monitoring schedule (see
policy 4.4), including approval of any permitted non-audit services to be provided by the independent
auditor.
Deliverable #3: Assurance that the auditor has unfettered access to organizational management and
records.
Deliverable #4: Review with the independent auditor any problems encountered performing the audit,
the audited financial statements, and any management letter provided by the auditor.
Deliverable #5: Review of annual Form 990 prior to distribution to Board of Directors and subsequent
submission to IRS.
Deliverable #6: Oversight of management of NAFC’s Board-designated long-term investment reserves,
ensuring Investment Advisor adherence to the Board-adopted Investment Policy.
Deliverable #7: Recommendations for Board consideration regarding revisions to the Board’s fiscal
and investment policies.
B. Deliverable #8: “Direct Inspection” (internal audit) monitoring of compliance with the Board’s fiscal
policies (Financial Condition, Asset Protection, Financial Planning and Budgeting, Compensation and
Benefits), as may be directed/scheduled by the Board per policy 4.4 Monitoring CEO Performance.
Authority: To direct work of outside auditors, to use management time as needed for administrative
support, and to incur costs of up to $20,000 for all matters related to the audit.
C. Composition: Chaired by the Treasurer, plus three additional members, at least one of whom is to be
a Board member, appointed by the Board each year at its June/July Board meeting.
Governing Policies of the NAFC Board of Directors
Policy 2.9 Board Size, Nomination, Election and Term Limits
Date of adoption / Last revision: May 7, 2015
The Board aims to maintain a size of twelve (12) members. The Nominating Committee will properly screen and
nominate a slate of individuals to fill Board vacancies, and, for Board consideration, a slate of officers (Board
Chair, Vice-Chair, Secretary and Treasurer—as stipulated in the Bylaws)
1. The Nominating Committee (“the Committee”) will be comprised of four (4) members to be elected
annually by the Board at its January/February meeting. The Immediate Past Chair, if still serving as a
voting director, shall be one of the Committee members, and shall serve as its chairperson. Committee
members will be selected from those not currently eligible for or seeking re-nomination.
2. Before May 31
st
, the Committee will confer with the Board of Directors to determine nominating priorities
as to competencies, representation and other attributes that will enhance the Board’s capacity to lead
NAFC in service to member clinics and the diversity of the patients that they serve.
3. In June, the Committee will issue a Call for Nominations to the membership, Board members and key
organizational allies/constituents considered to be potentially helpful resources in identifying candidates
with targeted attributes. An application form shall be provided to interested candidates, accompanied by
information outlining the expectations and responsibilities of Board members as outlined in these
governing policies. The deadline for nominations shall be no less than six weeks after the Call for
Nominations is posted.
4. Upon initial screening of nominating form/application, the Committee will identify and arrange telephone
interviews (or face-to-face, if geographically feasible) with potential nominees, prior to which they are to
be provided summary documents re: role of Board of Directors and expectations of individual
participation. At least two Committee members meet with/interview each potential nominee.
5. If candidacy deemed worthy of advancing, the Committee will arrange for potential nominees to meet with
the CEO, via telephone or otherwise, providing opportunity for greater familiarization with NAFC, and for
the CEO to offer impressions to Nominating Committee.
6. Prior to recommendation to the Board, proposed nominees are to be provided NAFC’s Bylaws, Governing
Policies Manual, and an overview of NAFC’s programs, plans and finances. Candidates must
acknowledge in writing their understanding of the expectations and responsibilities of NAFC Board
members (see Board Members’ Individual Responsibilities policy), and shall be strongly encouraged to
attend the annual Conference in October.
7. At the Board’s October meeting, the Board shall act on the Nominating Committee’s recommendations for
new Board members:
A. The Board shall approve or disapprove the Nominating Committee’s nominations for Board members
from the clinic membership category as a single slate. Should the slate not be approved, nominations
for the respective positions will be opened to the floor of that Board meeting. The Board may
recommend to the clinic membership, at its discretion, a slate with up to two candidates per vacancy.
B. By November 1
st
of each year, a ballot with approved candidates listed, and a write-in option, shall be
sent electronically to each voting member, and members will be asked to vote (electronically) to fill any
open Board positions within fourteen (14) days.). If more candidates are listed on the ballot than there
are vacancies, those with the highest number of votes shall be elected.
C. As applicable based on Board size and terms, the Board shall also approve or disapprove the
Nominating Committee’s nominations for Board members not from the clinic membership category as a
single slate. Should the slate not be approved, nominations for the respective positions will be opened
to the floor of that Board meeting.
D. Newly elected Board members will be announced by November 30
th
. They will be invited to attend, in a
non-voting capacity, in any Board meetings in the month of December, and shall take office at the first
meeting of the calendar year.
Governing Policies of the NAFC Board of Directors
Policy 2.9 Board Size, Nomination, Election and Term Limits,
continued
8. At the December Board meeting, the Nominating Committee shall recommend to the Board a proposed
slate of officers (Chair, Vice-Chair, Secretary and Treasurer). Nominations for officer positions should be
predicated on the Committee’s judgment of the individual’s capabilities vis-a-vis the respective office (i.e.
the Treasurer’s role as Chair of the Audit Committee, and the ability/willingness of prospective Chair and
Vice-Chair candidates to fulfill expectations articulated in the Board Chair’s Role and Authority policy
(2.4).
A. Should the slate not be approved, nominations for the respective positions will be opened to the
floor of that Board meeting.
B. Those elected shall take office at the first meeting of the calendar year.
9. Board members shall serve no more than three (3) consecutive three (3) year terms. The only exception to
this policy is the Immediate Past Chair whose term may be extended for one year if having served as Chair
in the final year within this term limit. Board members who serve three (3) consecutive three (3) year terms
may be nominated for Board membership again after spending a minimum of one year(s) as a non-member
of the Board.
10. The Board recognizes the value of both continuity and of fresh perspective. Re-nomination/nomination of
Board members will thus be based upon such factors including a prospective Board member’s personal
knowledge, skills, demonstrated leadership and commitment to the Association, professional relationships,
professional associations, commitment to support and participate in the Board’s established governing
structure, and, for existing Board members, fulfillment of individual Board members’ responsibilities. As the
Association’s needs may change over time, it is expected that the Nominating Committee may find it
necessary or beneficial to replace at least some members whose current terms are expiring with individuals
who may better satisfy such needs. Accordingly, no member should expect to be re-elected.
Governing Policies of the NAFC Board of Directors
Policy 2.10 Budgeting for Board Prerogatives
Date of adoption / Last revision: December, 2021
The Board will consciously invest in its ability to govern effectively.
Accordingly:
1. The Board will allocate resources to ensure it has sufficient skills, methods and supports to assure
excellence in its leadership.
A. Training will be used appropriately to orient new Board members and to increase existing Board
members’ skills and knowledge.
B. Outside monitoring, including fiscal audit, will be arranged as needed to help the Board have
confidence that organizational performance meets expectations, as stated in these policies. This
includes, but is not limited to, audits, reviews or opinions on fiscal, legal or governance matters.
C. Outreach mechanisms will be used as needed to ensure the Board understands owners’ viewpoints
and values, and issues pertinent to the free and charitable clinics sector.
2. Costs will be prudently incurred, but sufficient to ensure the development and provision of superior
governance. Annual governance prerogatives to be considered include costs for:
A. Board meeting and retreat costs (including Board travel).
B. Board member travel/reimbursements (attendance at third-party conferences, workshops, etc.).
C. Board training (governance consulting, publications, etc.)
D. Fiscal audit and other third party monitoring of organizational performance.
E. Opinion surveys, focus groups and other membership linkage activities.
F. Board committee functions (other than Audit, as itemized in D above).
3. The Board will establish its budget for these prerogatives in the next fiscal year each year during the
October meeting.
Governing Policies of the NAFC Board of Directors
Policy 2.11 Investment Policy
Date of adoption / Last revision: December 2021
This statement of investment policy is set forth by the Finance Committee of The National
Association of Free & Charitable Clinics, Inc. (NAFC) in order to:
1. Define and assign the responsibilities of all involved parties.
2. Establish a clear understanding for all involved parties of the investment goals and objectives of the
NAFC’s assets.
3. Offer guidance and limitations to all Investment Managers regarding the investment of the Fund’s
assets.
4. Establish a basis for evaluating investment results.
5. Manage the Fund’s assets according to prudent standards as established in common trust law.
6. Establish the relevant investment horizon for which the assets will be managed.
Time Horizon
The investment guidelines are based upon a long term investment, therefore interim fluctuations should be
viewed with appropriate perspective.
Risk Tolerances
NAFC recognizes and acknowledges some risk must be assumed in order to achieve long-term investment
objectives, and there are uncertainties and complexities associated with contemporary investment markets.
In establishing the risk tolerances for this IPS, NAFC’s ability to withstand short and intermediate term variability
was considered. NAFC’s prospects for the future, current financial condition and several other factors suggest
collectively some interim fluctuations in market value and rates of return may be tolerated in order to achieve the
longer-term objectives.
Asset Allocation:
Short–term Horizon 100% Fixed Income and Cash
These funds, which are identified as the 6 month operating expense reserve will be invested in money
markets and if, appropriate low risk Treasury bill Funds. These funds will be more liquid and provide the
NAFC with the ability to call upon for operational requirements if and when needed.
Medium-term Horizon 80-100% Fixed Income, 0-20% Equity & Cash
These funds will be designed to generate moderate returns on principal while keeping the exposure to
risk relatively low. Investments will include medium-term bonds, mutual funds, equity funds and individual
stocks.
Long-term Horizon 40-70% Equity, 30-60% Fixed Income & Cash
This fund will be geared towards growing principal while continuing to generate current returns. This
portfolio will have increased volatility over the short and medium term portfolios but will likely provide
higher returns and provide potential for growth of principal.
DUTIES AND RESPONSIBILITIES:
Financial Advisor
NAFC has retained an objective, third-party Financial Advisor to assist NAFC in managing the investments. The
Advisor will be responsible for guiding NAFC through a disciplined and rigorous investment process. The primary
responsibilities of the Financial Advisor to NAFC are:
Governing Policies of the NAFC Board of Directors
Policy 2.11 Investment Policy
Date of adoption / Last revision: ________
1. Provide sufficient asset classes with different and distinct risk/return profiles so NAFC can prudently diversify
the Portfolio.
2. Prudently select investment options.
3. Control and account for all investment expenses.
4. Monitor and supervise all service vendors and investment options.
Finance Committee/Board of Directors
1. Approve initial investment policy statement.
2. Periodically review portfolio performance with Financial Advisor.
3. Periodically review Financial Advisor and their affiliated company for service and guidance amongst the
Finance Committee.
4. Periodically review this IPS to determine whether stated investment objectives are still relevant. It is not
expected that the IPS will change frequently. In particular, short-term changes in the financial markets should
not require adjustments to the IPS.
Governing Policies of the NAFC Board of Directors
Policy 3.0 General Management Constraint
Date of adoption / Last revision: December, 2021
The CEO will not cause or allow any practice, activity, decision or organizational circumstance that is illegal,
imprudent, or in violation of commonly accepted association management ethics and practices.
Governing Policies of the NAFC Board of Directors
Policy 3.1 Treatment of Members / Constituents
Date of adoption / Last revision: December, 2021
With respect to interactions with members and constituents, the CEO will not cause or allow conditions or
procedures which are unfair, unsafe, untimely, unresponsive, undignified or which fail to provide appropriate
confidentiality.
Further, the CEO will not:
1. Collect, review, transmit, store or destroy member/customer data without protecting against improper
access to that information.
2. Operate without clearly conveying to members/customers what may be expected from the services offered.
3. Operate without having in place a complaint/response process to address concerns raised by
members/consumers.
Governing Policies of the NAFC Board of Directors
Policy 3.2 Treatment of Staff
Date of adoption / Last revision: December, 2021
With respect to the treatment of volunteers and employees, the CEO will not cause or allow conditions that are
unfair, unsafe or undignified.
Further, pertaining to employees, the CEO will not:
1. Operate without ensuring employees are provided with written personnel policies, reviewed by qualified
legal counsel, which clarify personnel rules for employees and provide for effective handling of
complaints/grievances.
2. Allow employees to be unaware of the Board’s governing policies, including but not limited to, this
Treatment of Staff policy, along with the CEO’s interpretations of staff’s protections under this policy.
3. Retaliate or allow retaliation against an employee for non-disruptive, internal expression of dissent, or for
reporting to management or to the Board of Directors (per the process for handling of grievances in the
Employee Handbook) acts or omissions by NAFC personnel, management or the Board of Directors that
the employee believes, in good faith and based on credible information, constitutes a violation of state or
federal law or a governing policy of the Board.
A. Employees may not be prevented from grieving to the Board when (a) internal grievance procedures
outlined in the Employee Handbook have been exhausted and (b) the employee alleges that Board
policy has been violated.
4. Allow staff to be unprepared to deal with reasonably foreseeable emergency situations.
Governing Policies of the NAFC Board of Directors
Policy 3.3 Financial Condition and Activities
Date of adoption / Last revision: December, 2021
With respect to financial condition and activities, the CEO will not cause or allow the development of fiscal
jeopardy, or a material deviation of actual expenditures from the Board’s Ends priorities.
Further, the CEO will not:
1. Manage finances without accrual based accounting adherent to applicable Generally Accepted Accounting
Principles (GAAP).
2. Expend more funds than have been received in the fiscal year to date, unless the liquidity and reserve
requirements below are met (choose from below).
A. The CEO will not borrow from operating reserves (non-designated accumulated excess revenues) in an
amount greater than can be replenished by certain and otherwise unencumbered revenues within 120
days.
B. The CEO will not allow available/unrestricted cash and cash equivalents to drop below 25% of
forecasted annual operating expenses.
3. Use Board-designated Investment Reserve funds.
4. Use restricted funds for purposes other than designated.
5. Borrow funds (with exception of credit cards used for normal business purposes paid in full each month).
6. Operate without settling payroll obligations and payables in a timely manner.
7. Allow tax payments or other government ordered payments or filings to be overdue or inaccurately filed.
8. Neglect to ensure fulfillment of accounting and reporting requirements as applicable to any governmental or
private grant funding received.
9. Execute a purchase commitment, check or electronic funds transfer for operations of greater than $15,000,
unless such purchase was explicitly itemized in budget monitoring data previously disclosed to the Board.
Splitting orders to avoid this limit is not acceptable.
10. Operate without ensuring capital items purchased for a value of $5,000 or more, and having a useful life of
more than one year, are capitalized and depreciated over the estimated useful life of the asset.
11. Acquire, encumber, lease or dispose of real property.
12. Operate without aggressively pursuing material receivables after a reasonable grace period.
13. Operate without adequate internal controls over receipts and disbursements to avoid unauthorized
payments or material dissipation of assets.
A. Operate without clearly delineated procedures and limitations for reimbursement of authorized
expenses incurred by board members and committee members, and others who are entitled to
reimbursement from NAFC.
B. CEO credit card statements are to be reviewed by the Treasurer or, if not available, the Board Chair on
at least a quarterly basis. Expense reimbursements must be reviewed and authorized for payment by
the Treasurer or, if not available, the Board Chair.
Governing Policies of the NAFC Board of Directors
Policy 3.4 Asset Protection
Date of adoption / Last revision: December, 2021
The CEO will not cause or allow NAFC’s assets to be unprotected, inadequately maintained or
unnecessarily risked.
Further, the CEO will not:
1. Allow NAFC to be without sufficient insurance coverage, including:
A. Property and casualty losses to at least replacement value.
B. Liability losses to Board members, staff and the organization itself in an amount equal to or greater than
the average for comparable organizations.
C. Medical mal-practice.
D. Employee theft and dishonesty.
E. Cyber-liability.
2. Subject NAFC’s facilities and equipment to improper wear and tear or insufficient maintenance, or not
provide safeguards against loss of theft.
3. Operate without employing risk management practices to minimize exposure of the organization, the Board,
staff or their agents to claims of liability.
4. Allow any purchase without reasonable protection against conflicts of interest.
5. Allow a purchase of any $5,000 or more without having compared prices and quality, or above $20,000
without a minimum of three documented quotes. Allow sole source procurements in excess of $20,000
without documentation of circumstances meriting sole source.
6. Allow NAFC’s intellectual property, information, resources and files to be exposed to loss, improper access,
misuse or significant damage.
7. Operate without adhering to a Records Retention Schedule, approved by qualified legal counsel, for the
maintenance of documents and records.
8. Operate without internal controls over receipts and disbursements, and inventory of depreciable capital
assets, sufficient to meet the Board-appointed auditor’s standards (as set forth in the auditor’s Management
Letter and/or other correspondence).
9. Compromise the independence and transparency of the Board’s relationships with auditors or other
providers of governance support (attorneys, consultants, etc.). Such entities may not be engaged by the
CEO unless explicitly Board authorized.
10. Invest or hold operating capital in insecure instruments or in non-interest-bearing accounts except where
necessary to facilitate ease in operational transactions.
11. Invest reserve funds in a manner inconsistent with the Investment Policy.
12. Endanger NAFC’s public image or credibility.
13. Change the organization’s name or substantially alter its identity.
Governing Policies of the NAFC Board of Directors
Policy 3.5 Financial Planning and Budgeting
Date of adoption / Last revision: December, 2021
Financial planning for any fiscal year or the remaining part of any fiscal year** will not deviate materially from the
Board’s Ends priorities, risk financial jeopardy or fail to address multi-year planning needs and considerations.
Accordingly, the CEO will not present or utilize budgets that:
1. Risk incurring those liquidity situations or conditions described as unacceptable in the Financial Conditions
and Activities policy.
2. Omit credible projection of revenues and expenses, separation of capital and operational items, cash flow
projections, and disclosure of planning assumptions.
3. Plans the expenditure in any fiscal year of more funds than are conservatively projected to be received.
4. Omits allocation for Board activities per the Budgeting for Board Functions policy (see policy in Board
Process).
Governing Policies of the NAFC Board of Directors
Policy 3.6 Compensation and Benefits
Date of adoption / Last revision: December, 2021
With respect to employment, compensation and benefits for employees, consultants,
contractors or volunteers, the CEO will not cause or allow jeopardy to NAFC’s fiscal integrity or public image.
The CEO will not:
1. Establish salaries and benefits that deviate materially from the professional market value for the skills
employed in the association management sector in the Washington DC area.
A. Total compensation, including benefits, should be targeted at or near the mean of the market, but with
flexibility so that compensation is based on experience, performance, and business need to attract and
retain specific talent.
2. Change his or her own compensation.
3. Change his or her own benefits, except as consistent with the package for all other employees.
4. Promise or imply anything other than "at-will" employment.
5. Create obligations to consultants or contract vendors for longer than one year.
6. Establish or change retirement benefits so as to cause situations unpredictable for the organization or
inequitable for employees.
Governing Policies of the NAFC Board of Directors
Policy 3.7 Emergency Management Succession
Date of adoption / Last revision: December, 2021
The CEO will not operate without management succession planning processes to facilitate
smooth and competent operation of the organization during key personnel transitions.
Further, the CEO will not:
1. Operate without one member of the management team sufficiently familiar with Board and CEO issues and
processes to take over with reasonable proficiency as an interim successor.
Governing Policies of the NAFC Board of Directors
Policy 3.8 Board Awareness and Support
Date of adoption / Last revision: December, 2021
The CEO will not cause or allow the Board to be uninformed or unsupported in its work.
The CEO will not:
1. Withhold, impede or confound information necessary for the Board’s informed accomplishment of its job.
The CEO will not:
A. Neglect to submit monitoring reports (including the CEO’s policy interpretations, as well as compliance
data) required by the Board (see Monitoring CEO Performance policy in Board-Management
Delegation) in a timely, accurate and understandable fashion.
B. Let the Board be unaware of any actual or anticipated noncompliance with any Ends or Management
Parameters policy, regardless of the monitoring schedule set forth by the Board.
C. Let the Board be without objective background/decision information it periodically requests, or unaware
of relevant trends or incidental information (e.g., anticipated adverse media coverage, threatened or
pending lawsuits, or material external and internal/organizational changes). Notification of planned
internal changes is to be provided in advance, when feasible.
D. Let the Board be unaware of any Board or Board member actions that, in the CEO’s opinion, are not
consistent with the Board’s own policies on Board Process and Board-Management Delegation,
particularly in the case of Board or Board member behavior that is detrimental to the work relationship
between the Board and the CEO.
E. Present information in unnecessarily complex or lengthy form or without differentiating among three
types of written communications: 1) monitoring, 2) decision preparation or "action item"; and 3)
incidental/FYI.
2. Allow the Board to be without logistical and administrative support for official Board, officer or committee
communications and functions.
3. Deal with the Board in a way that favors or privileges certain Board members over others except when:
A. Fulfilling individual requests for information, or
B. Responding to officers or committees duly charged by the Board.
4. Neglect to submit for the Board’s Consent Agenda those items delegated to the CEO yet required by law,
regulation or third party to be Board-approved, along with applicable monitoring information.
Governing Policies of the NAFC Board of Directors
Policy 4.0 Board-Management Connection
Date of adoption / Last revision: December, 2021
The Board’s official connection to the operating organization, its achievements and conduct is through a chief
executive officer (CEO).
Governing Policies of the NAFC Board of Directors
Policy 4.1 Unity of Control
Date of adoption / Last revision: December, 2021
The Board of Directors acts with one voice in establishing expectations of the CEO.
Accordingly:
1. No Board member, officer or committee has authority over the CEO, or any member of the CEO’s staff,
except in rare instances when the person or committee has been explicitly authorized to direct or use staff
resources for a specific issue.
2. Board members or committees may request information, but if such request--in the CEO’s judgment--
requires a material amount of staff time or funds or is disruptive, it may be declined. The committee or
Board member may then refer the request to the full Board for consideration.
Governing Policies of the NAFC Board of Directors
Policy 4.2 Accountability of the CEO
Date of adoption / Last revision: December, 2021
All Board authority delegated to management is delegated through the CEO, Therefore, the authority and
accountability of staff, as far as the Board is concerned, is considered to be the authority and accountability of the
CEO.
Accordingly:
1. The Board will not give instructions to any staff other than the CEO.
2. The Board will not evaluate, either formally or informally, any staff other than the CEO.
3. The Board will consider and evaluate CEO performance as synonymous with organizational achievement of
Ends and compliance with Management Parameters. No performance measure established by the Board or
by sub-sets of the Board shall conflict with or modify this measure of performance
4. Consequently, the CEO’s accountability and evaluation will be based on performance in two areas:
A. Organizational achievement of the Board’s Ends policies.
B. Organizational operations within the parameters of legality, prudence and ethics established in the
Board’s Management Parameters policies.
Governing Policies of the NAFC Board of Directors
Policy 4.3 Delegation to the CEO
Date of adoption / Last revision: December, 2021
The Board will direct the CEO through written policies setting forth the organizational Ends to be achieved and
organizational situations/actions to be avoided, allowing the CEO to use any reasonable interpretation of these
policies.
Accordingly:
1. Ends policies direct the CEO to achieve certain results, for certain recipients at a specified worth or priority.
These policies will be systematically developed from the broadest, most general level, to more defined
levels.
2. Management Parameters policies define the boundaries of legality, prudence and ethics within which the
CEO is to operate. These policies describe the practices, activities, decisions and circumstances that would
be unacceptable to the Board, even if effective in producing the desired results. Management Parameters
will also be systematically developed from the broadest, most general level to more defined levels. To
ensure accountability for performance, the Board will not prescribe organizational means delegated to the
CEO.
3. An Ends or Management Parameters policy at a given level does not limit the scope of any preceding level.
4. The CEO is authorized to establish further policies, make decisions, take actions, establish practices and
develop activities as long as they are consistent with any reasonable interpretation of these Ends and
Management Parameters policies.
5. The Board may change its Ends and Management Parameters policies, thereby shifting the boundary
between Board and CEO domains. By doing so, the Board changes the latitude of choice and authority
given to the CEO. However, as long as any particular delegation is in place, the Board will respect and
support decisions made by the CEO that are consistent with Board policy, as reasonably interpreted.
Governing Policies of the NAFC Board of Directors
Policy 4.4 Monitoring CEO Performance
Date of adoption / Last revision: December, 2021
The Board will systematically and rigorously monitor CEO job performance, determining the extent to which Ends
are being achieved and whether operational activities fall within boundaries established in Management
Parameters policies.
Accordingly:
1. Monitoring is simply to determine the degree to which Board policies are being met. Information that does
not address accomplishment of Ends and compliance with Management Parameters will not be considered
in the Board’s evaluation of CEO performance.
2. Ends and Management Parameters policies may be monitored by one or more of three methods:
A. Internal Reports: The CEO discloses in writing his/her policy interpretations, along with data supporting
his/her assessment of accomplishment of, or compliance with, the policy under review. As appropriate
in a given context, the CEO may present information supporting the "reasonableness" of his/her
interpretation.
B. External Reports: An external, disinterested third party selected by and reporting to the Board assesses
accomplishment of, or compliance with, Board policies, as reasonably interpreted by the CEO.
C. Direct Board Inspections: A designated Board member(s) or committee assesses CEO compliance with
a given policy, as reasonably interpreted by the CEO.
3. In every case, the Board is committed to accepting any reasonable CEO interpretation of the Board policy
being monitored. The Board is the judge of reasonableness, and will always use the “reasonable person”
test (whether what the CEO did was what a reasonably prudent executive would do in that context), even if
those choices differ from those the Board or any of its members may have made.
4. In every case, the Board will judge whether:
A. The CEO’s interpretation is reasonable, and
B. Data demonstrate reasonable accomplishment of, or compliance with, the CEO’s interpretation.
5. Interpretations determined by the Board not to be reasonable, or data determined not to demonstrate
reasonable accomplishment of, or compliance with, a Board policy as interpreted, will be subject to a
remedial process agreed to by the Board.
6. All policies instructing the CEO will be monitored at a frequency and by a method chosen by the Board. The
Board may monitor any policy at any time by any method, but will ordinarily depend on the following routine
schedule:
