News and Views
February 11, 2019
Posted in: WATSON Views
Financial oversight is a key board responsibility, for organizations large and small. We often see unchecked spending scandals, à la Ryerson Student Union, at smaller organizations without robust internal controls and proper financial oversight by the board. Without malice or negligence, these organizations often lack financial expertise at the board level and simply just don’t know what questions to ask.
In Ryerson’s case, while they have a Finance Committee and several publicly-available financial policies, they likely lack financial expertise on the board as the board is largely populated by students. This is a considerable organizational risk, with significant financial, reputational, and human resource consequences.
When financial expertise is lacking on the board, there are options available to help fill this crucial gap. Some boards bring on external directors or committee members in a governance or advisory capacity to bring this important skill-set to the board table or finance committee. In Ryerson’s context, there are likely countless alumni and faculty members qualified and motivated to fill this role.
It’s an expensive lesson to learn.