How to be an effective board treasurer

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How to be an effective board treasurer

The role of treasurer is vital to the effective operation of your organisation regardless of its size or mission. It is the second most important role on your board after the chair.

Being treasurer of a not-for-profit organisation has the same level of responsibility as that of a large for-profit company and can be just as challenging. With the right skills and knowledge, however, this role can also be personally rewarding.

While every director on the board has equal responsibility for decisions and actions of the board, they will trust the treasurer to provide accurate, timely and complete information about the financial position of the organisation.

This guide will take you through the role of treasurer, and how to be effective in this role.

Click here for an article - What's involved in being a treasurer for a not-for-profit group?

The role of a board treasurer

A board treasurer’s primary role is to oversee  the financial management of the organisation. (Click here for a Financial Management Checklist).

You will play a key role in developing the organisation's annual budget and ensuring it is followed. (Click here for How to create a budget for your organisation, and Budgeting for Treasurers.

You will also need to ensure that financial reports to the board, funding and regulatory bodies are produced on time, are accurate and provide the financial information needed for strategic planning. (Click here for Strategic Planning for Treasurers).

One of the most important roles of the treasurer is to ensure that the board is aware of any financial concerns and especially if the organisation is at risk of becoming insolvent (that is, unable to pay its debts or financial commitments).

Key responsibilities:

  • Work with the executive officer in the preparation of the budget.
  • Monitor how the organisation performs against the budget
  • Ensure the board's financial policies are up-to-date and followed - click here for a link to a Policy Bank which includes Financial Policy Templates
  • Report to the board and members on financial matters
  • Ensure all reports to regulatory bodies are produced on time and are accurate
  • Oversee the organisation's annual audit - click here for Auditors and Assets, also How to organise an external audit.
  • Chair the finance-related board sub-committees such as finance and audit and risk - click here for Finance, Audit and Risk Management Sub-Committee Terms of Reference.
  • Oversee all financial transactions, and in line with financial policies, counter-sign cheques, payroll etc
  • Implement and oversee processes that protect the organisation from fraud, theft or misappropriation of funds
  • Encourage the financial literacy of fellow directors by providing professional development opportunities and mentoring. Boards with a sound financial literacy are better able to understand the organisation’s financial reports, ask informed questions and support financial oversight and strategic planning. - click here for Financial Literacy for Nonprofit boards.

The treasurer’s responsibilities in board meetings

The primary responsibility of a treasurer in board meetings is to report on the organisation’s finances and answer questions from other board members about financial matters.

Click here to go to the Policy Bank where under Governance Policies, there is a downloadable Board Office-Bearer Policy and Positions Statements.

Your role in board meetings includes:

  • Ensuring that finance related items are on the board meeting agenda
  • Coordinating production of board financial reports and information, and ensuring they are distributed to directors well before the meeting (usually one week in advance)
  • Reporting to the board on the current financial status of your organisation including anything that is outside your organisation’s budget or business plan
  • Coordinating production of necessary reports for annual and special general meetings (AGMs and SGMs).

The personal characteristics of an effective treasurer

An effective board treasurer is able to oversee the financial matters of an organisation, ensure financial policies are adhered to and support the board and senior staff person in strategic planning. Some "skills-based" boards require this role to be filled by a finance professional such as an accountant. Anyone taking on the role of treasurer must have, or be prepared to gain, a working understanding of accounting and the laws and regulations that govern an organisation’s financial responsibilities.

Some personal characteristics of effective board treasurers include:

  • Commitment to the role of treasurer
  • Attention to detail – ‘near enough’ is not good enough
  • Being analytical, probing and observant – asking for information until you are satisfied that your queries are adequately answered
  • Tact, diplomacy, integrity and honesty
  • Clear and accurate communication
  • Encouraging, mentoring and supporting others
  • Confidence to ask difficult questions and secure adequate responses.

Other Resources

Here are some good resources available through the Institute of Community Directors:

And here are some useful resources from BoardConnect:

There is also a How to ensure (as a director) that your organisation has good financial management.