A Guide To Setting Ethical Standards For Your NPO

All nonprofits have a clear mission to achieve. Still, the process of achieving it isn’t as black and white as it seems. Setting ethical standards for your nonprofit is an important task. Yet it takes much consideration. So when reviewing your ethical guidelines, here are some factors to consider. Join us in this episode of the Strategic Nonprofit Podcast. As host Trista sits down with the CEO of AMC NPO Solutions, Tom Abbott. Listen in as they discuss the importance of setting ethical standards. Including a breakdown of three different types with examples.

Also read:

Why’s it important to set NPO ethical standards?

By setting ethical standards for the nonprofit organization, the board advises both the directors and staff on what is necessary from them in terms of their being and position. In general done by the board, who develops and approves the director’s code of conduct, a CEO code of conduct, and a conflict of interest policy.

Overall, setting ethical standards helps your board members and staff conduct themselves honestly and with integrity.

How do you set ethical standards for your NPO?

In general, established NPOs should review their codes of conduct, codes of ethics, and conflict of interest policies every two years. As a result, you can ensure you’ll earn and keep the public’s trust.

Also read: To Obtain the Best Possible Performance, Read This Nonprofit Board Policy Manual Carefully and Thoroughly

However, setting ethical standards for new nonprofits starts by developing and approving a Mission Statement, Vision Statement, Values Statement (Code of Ethics), a Director’s Code of Conduct, a CEO Code of Conduct, and a Conflict of Interest Policy. Discover some examples of nonprofit ethical standards below:

What are examples of nonprofit ethical standards?

Here are some examples of possible clauses you would include in a director’s code of conduct, a CEO Code of Conduct, and a Conflict of Interest Policy:

Examples of an NPO Director’s Code of Conduct

  • “Directors shall endeavor to direct the activities of the organization as a whole, rather than in their own interest or that of any specific group.”
  • “Regardless of their personal viewpoints, directors shall not speak against or in any way, undermine board solidarity. Once a board decision has been made.”
  • “Directors are expected to attend all board meetings and be prepared for the meetings, having read pre-circulated material in advance.”
  • “The official spokesperson for the society (the chair of the board of directors and/or CEO) will address all public requests for comment on society and policies shall be referred to them.”

Examples of an NPO CEO Code of Conduct

  • “The CEO shall adhere to the society’s conflict of interest policy and immediately disclose possible conflicts to the board.”
  • “Only the CEO shall advise the board of any staffing changes at the senior level.”
  • “The CEO shall not change their compensation, benefits or holidays.”

Examples of an NPO Conflict of Interest Policy

  • A definition of conflict of interest. A common conflict of interest definition could be, “Any situation where your personal interests or those of a close friend, family member, business, associate corporation, or partnership in which you hold a significant interest or a person to whom you owe an obligation, could influence your decisions and impair your ability to act in the society’s best interests or represent the society fairly impartially and without bias.”

Final word: Setting ethical standards for your NPO

A great next step is to look at if you have a concise conflict of interest, guideline or policy. So, if you don’t, it’s time to start building one. Reach out to us for some templates to start!

Need help increasing your nonprofit’s effectiveness?

An efficient board starts with the implementation of an effective governance model. 

AMC’s governance training helps nonprofit boards navigate governance and management to stay focused on their organization’s mission and visions. It includes valuable tools and clear guidance to address many not-for-profit organizations’ governance challenges.

Join NPO Academy’s Online Board Governance Training and implement the Complementary Model of Board Governance to build an effective partnership between the volunteer board, CEO and staff.

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