Only 20% of not-for-profits have made any changes to their board governance policies as a result of the Sarbanes-Oxley Act, even though 57% said they have some level of familiarity with the regulations. Overall, only 38% have had discussions with their board about the Sarbanes-Oxley Act, according to a Grant Thornton LLP survey.
“It is now more than a year since Sarbanes-Oxley was enacted and still most large and small not-for-profit organizations haven’t made any changes to their board governance policies,” said Bob Leavy, Grant Thornton’s national managing partner for the Not-for-Profit Industry Practice. “While Sarbanes-Oxley is not a mandate for not-for-profit organizations, many of the provisions of the act would help organizations run a significantly tighter and more efficient operation.”
Perhaps more telling of the lack of impact Sarbanes-Oxley has had on these organizations is that nine out of 10 have not made any changes to the composition of their audit committee and only 17% responded to having a “whistle-blowers” policy.Additionally, only 21% of those without these policies have considered adopting such a policy.
“It is surprising that so few not-for-profit organizations have or are considering a whistle-blowers policy,” Leavy said. “This could cause a potential problem down the road if an organization is subject to some sort of lawsuit or conflict of interest.”
The complete 2003 Survey of Not-for-Profit Leaders will be available in early December. More information is available at www.grantthornton.com/nfp .