Many board members are appointed to their roles because they have had success in business, have a strong resume as leaders of non-profit organizations, or have made great achievements in their respective communities. However, this does not necessarily mean that as a board member they are prepared to understand fiscal data thrust in front of them. As a result, the director may be reticent to participate in fiscal matters of pre-eminent importance. Since fiscal information tends to be provided to board members with little preface or minimal overview, critical questions often go unasked.

As a board member, understanding and utilizing fiscal information is critical. Yet a great many board members find themselves at a loss when the organization’s financial data is put before them. This article by financial faculty Paul Wiltse explains the balance sheet, income statement and a wide variety of key financial ratios.