1. 2012 Governance & Leadership Institute January 29 – 30, 2012

2. The Changing Landscape of Independent School Governance Steve Robinson

3. Since the Sarbanes-Oxley Act (2002) Enacted for publically traded companies following the Enron scandal in 2001 Has become the de-facto court standard for non- profits Addresses separation of governance and management Expects a more strict fiduciary and oversight role for the board

4. Ten general principles of corporate governance from Sarbanes-Oxley reforms Role of the board Importance of Independent Directors Audit Committee Governance and Nominating Committee Compensation Committee Disclosure and Integrity of Institutional information Ethics and business conduct codes Executive and Director compensation Monitoring compliance and investigating complaints Document and destruction and retention

5. Governance Reforms Emanating from Sarbanes-Oxley for Corporations Board size Diverse composition Nominating by independent directors Term limits Focused agenda Regular and long enough board meetings Separate CEO and board chair Delegation of board duties to committee Committees hiring expert advisers Clarifying accountability

6. Applications of Sarbanes-Oxley for Non-profits Role of the board Importance of Independent Directors Audit Committee Governance and Nominating Committee Compensation Committee Disclosure and Integrity of Institutional information Ethics and Business Conduct Code Executive and Director Compensation Monitoring Compliance and Investigating Complaints Document Destruction and Retention

7. Is it time to rethink the governance model of independent schools? If so, what would it look like and where do we start?

8. DEFEND | CONNECT | INFORM The mission of SAIS is to provide leadership, accreditation services and professional development resources that will strengthen member schools as they fulfill their missions. WWW.SAIS.ORG PO BOX 369 | ALPHARETTA, GA 30009

9. Role of the Board Board is responsible for assuring the non-profit is managed appropriately Non-profit boards would benefit from a review of structure and operation of the board Non-profits may need to review assumptions about appropriateness of large/prospective donor boards Composition is important with diverse backgrounds to bring expertise to the board

10. Independent Directors Historic deference to management Board culture issues Special circumstances affecting appropriateness of independent director Application of Independent principles to non-profits Organizational support of directors

11. Audit Committee A non-profit with at least $1million gross revenues should have audited financials Audit committee comprised of independent directors not controlled by management Non-profit directors are interested in mission rather than share holders Independent director’s audit committee strengthens the board’s fiscal oversight Audit committee needs delegated authority from the board Rotation of audit partners At least one financial expert on the audit committee

12. Governance and Nominating Committee Governance / Nominating Committee Board evaluation Corporate Directors Governance Review

13. Compensation Committee Use of comparability data to avoid excessive compensation Evaluation of executive performance and succession planning

14. Disclosure and Integrity of Institutional Information Audit committee Just and reasonable compensation Senior officers to certify on organziation’s financials and controls Request from creditors on material changes in financial status although exempt from SEC regs unless issuing securities or tax exempt bonds

15. Ethics and Business Conduct Code Conflict of Interest policies and procedures Ethics and Business conduct codes

16. Executive and Director Compensation Based on an analysis of comparable organziations Reasonable with respect to the organization’s revenues and assets All compensation reported for tax purposes Director compensation / liability insurance Loans to officers or key employees frowned upon

17. Monitoring Compliance and Investigating Complaints Have policies and procedures for communication of concerns regarding possible violations of law, organizational ethics or business conduct codes. Written policy or program for communications of concerns regarding possible financial, accounting, or other legal and ethical violation to appropriate authority Whistle Blower policy

18. Document Destruction and Retention Review document destruction and retention policies