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Board of Directors Committees

Executive Committee  |  Audit Committee  |  Finance Committee  |  Governance, Nominating and Human Resources Committee

Finance Committee Charter

1. Purpose
   The Finance Committee (Committee) will assist the Board of Directors in its oversight responsibilities relating to fiscal management. In furtherance thereof, the Committee will:
   1. Review and recommend approval of an annual operating budget;
   2. Regularly review financial results;
   3. Ensure the maintenance of an appropriate capital structure; and,
   4. Oversee the management of organization-wide financial assets.
   In addition, in order to assist the organization in the proper and prudent management of its financial resources, the Committee will ensure that management employs personnel and systems capable of providing timely and accurate financial information to key decision-makers.
2. Committee Membership
   It is anticipated that the Committee will always include some members who possess skills in the disciplines of accounting, investment management, and capital structure/finance. It is also anticipated that based on those skills and the inherent complexity of the Conservancy’s finances, Committee members will be assigned areas of focus to ensure that important financial topics are reviewed in sufficient depth by Board members.
3. Key Responsibilities
   To fulfill its purposes, the Committee shall:
   1. Review and Approval of an Annual Operating Budget:
      Annually, the Committee will review the proposed annual operating budget for the ensuing fiscal year as presented by Conservancy management. After review and amendment, if necessary, the Committee will recommend a final operating budget to the full Board of Directors for approval. The approved operating budget formally confers spending authority for operating costs to management, subject to the policies and procedures adopted by the Conservancy. The approved operating budget may be amended, as appropriate, for significant new programs as long as funding of said programs is secured at the time (e.g., this generally occurs when large new grants are received to begin new programs).
   2. Review of the Financial Results:
      Monthly, members of the Committee will receive and review financial statements consisting of the then current year-to-date: 1) statement of financial position, 2) income statement, 3) operating statement; and 4) key financial performance benchmarks that the Committee deems relevant from time-to-time. These financial statements will be accompanied by a narrative from management highlighting any financial issues and, where necessary, management actions related thereto.
      
      In addition, at its regularly scheduled meetings, the Committee will also review the status of the Conservancy’s financial condition and discuss, in detail, issues that emerge from the review.
   3. Maintenance of an Appropriate Capital Structure:
      From time-to-time, the Committee will direct management to undertake longer term financial planning to evaluate future financial needs. The Committee will review the underlying analyses and assumptions, as well as the methodology utilized. The Committee will then recommend a capital structure that best meets the Conservancy’s needs, generally in the form of an external debt ceiling. Between formal longer-term financial planning, the Committee will evaluate the appropriateness of the debt ceiling with reference to a number of key debt metrics, including such things as the status of internal loans made from the Land Preservation Fund, and will make adjustments to the ceiling as necessary.
   4. Manage Organization-Wide Assets:
      The Conservancy’s assets primarily consist of land/land interests and investments. The Committee’s primary role relating to the management of these two asset classes is:
      • Land and land interests: approve the financing of capital projects, in total, either from the Conservancy’s Land Preservation Fund, or other sources, as appropriate.
      • Investments: carry out the responsibilities delegated to the Committee in the Conservancy’s Investment Policy. Key responsibilities include:
        • Setting investment objectives, by fund type
        • Establishing performance objectives and benchmarks
        • Devising the asset allocation strategy
        • Restricting investments, as necessary
        • Hiring/terminating investment managers
        • Regular review of performance results
        • Other responsibilities, as specified in the policy
      Actions necessary to fulfill certain responsibilities that are time-sensitive, may be performed at any time throughout the year by a majority of the Committee members.
   5. Timely/Accurate Financial Information:
      The Committee will continually review and advise management regarding the form, content and frequency of financial information necessary for it to fulfill its responsibilities described herein. Further, to the extent necessary to inform decision-makers, the Committee may advise management regarding key financial information and performance indicators necessary to evaluate the various internal business units throughout the organization.

For More Information about The Nature Conservancy’s Board of Directors:

• The Nature Conservancy’s Board of Directors
• Board of Directors Committees
• Common Language for Committee Charters
• Board of Directors Charter of Governance Responsibilities
• Board of Directors Member Profiles
• Bylaws of The Nature Conservancy and Summary Articles of Incorporation