In August 2009, In Trust emailed more than 1,800 board members (excluding board chairs) with a short survey on school finances. Of the board members contacted, 293 responded. In a summer 2010 article, Mary Catherine Bolster shared responses to this survey and offered her insights about what these responses said about the role of the board in financial matters.
When asked how important financial oversight is in relation to other board responsibilities, 81 percent of respondents indicated that it was either “the most important thing” or “very important.” And when it came to understanding institutional finances, more than 75 percent answered “yes” or “pretty sure” to the following questions:
Do you know how to interpret critically the financial data presented to you at board meetings?
Do you feel confident reading a balance sheet?
Do you know where to look to discern deviations from the approved budget?
Do you feel confident that you know the right questions to ask about your school’s finances?
Most illuminating were the responses to the question: “What would help you better understand the financial picture of your institution?” Responses included formal orientation specifically on institutional finances, clearer goals and benchmarks against which to examine financial reports, access to data of similar schools for comparison, simpler financial reports, and increased involvement of the board in financial decisions.
In Trust interviewed Robert Landrebe about the findings of this survey. A key takeaway was that board members need to truly understand the economics of their school, including whether the seminary’s resources are sufficient to support the institutional mission, whether the school is managing its resources appropriately, and whether the school operates within its means. Landrebe offers some suggestions for ensuring board members have this understanding, including creating concise financial reports that are easy to understand and ensuring that financial orientation occurs early in a board member’s service.
This survey was conducted in the middle of the economic recession, when financial understanding was critical. But the board members' responses suggest that boards need to have a thorough understanding of their institution’s finances whether or not the institution is financially stable.
To read more about the survey results, check out Bolster’s article. (You must be an In Trust subscriber or have an affiliation with an In Trust Center member school to see the article).
If you are a board member, do you identify with any of the responses given to the survey? What measures have you found work the best for understanding your school’s finances?