A Cautionary Tale for Nonprofit Boards

Three-quarters of the UK’s FTSE 250 companies had not discussed contingency planning for a possible Brexit with the chairman of the board or the chairman of the audit committee. The failure of corporate boards and management to engage on a matter of such significance presents a cautionary tale for nonprofit boards on at least three levels: risk management; board process and agendas; and board composition. In the case of Brexit, if company management had not been surfacing the topic on the board agenda, and board members did not ask questions, then how can shareholders have any confidence that boards and management are engaging on other matters that will affect the company’s value—issues such as climate change, ecosystems loss, and human rights, for example?