College of
Business
Administration
College of
Business
Administration
1. The so-called Third Sector in reality is becoming blended. Corporation directors serve on non-profit boards and many for-profit companies now have their own charitable foundations.
Is it appropriate for corporations to have their own foundations? What, if any, are the conflicting goals? How do 'private' foundations 'square' with Freidman's arguments as outlined in The Social Responsibility of Business is to Increase its Profits2. Gangle says that the biggest difference between the for-profit and not-for-profit entity is the lack of any shareholders in most of the latter.
Without such shareholders, who monitors the Board of Directors? Whose interests do Directors of not-for-profit organizations represent?3. What practical checks and balances might a non-profit use to guard against abuse by either management or the board? What are some of the problems with these?
4. Gangl says that a good method for ensuring appropriate compensation levels for board members is through the use of a compensation committee.
If you were asked to serve on such a committee, how would you establish a board member's compensation? Are there any unique factors to consider when determining a non-profit board member's compensation when compared to the for-profit world?5. Gangl quotes Supreme Court Justice Louis Brandeis' philosophy that "sunlight is the best disinfectant" and believes in mandatory annual public disclosure of a nonprofit's finances to keep everyone honest.
Do you agree? Does the same standard hold true for the for-profit world?6. Gangl says that you will "enhance opportunities for candid communications by including select senior managers in board meetings and providing informal contacts with board members."
Do you agree that this is desirable? What might be some of the pros and cons of this?7. Do "self-dealing" transactions need to be disclosed at board meetings as suggested in the article, or is this a relatively innocuous practice and simply the way things are done in business? Is it perhaps all right for the for-profit corporation, but not the non-profit?
8. Should the non-profit corporation be held to a higher standard?
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