On December 27 I commented about the audit committee’s role in risk management in reference to a seminar brochure that I had received. In the case of a nonprofit entity, the San Francisco Zoo tiger attack on December 25, and information about the Zoo’s management that is now coming to light in the press should to some extent highlight a nonprofit board’s possible responsibility to oversee risk management in areas that are important to that nonprofit.

As with the audit committee, there isn’t any specific authority that would require a nonprofit board to oversee risk management in any particular area. However, as we can now see with respect to the Zoo nonprofit entity, animal treatment, care and safety, and customer safety with respect to the animals are issues that a prudent nonprofit Zoo board would oversee to some extent. In the case of the San Francisco Zoo, the board may very well have been involved in that oversight. We don’t know whether it was or not. The fact that an incident occurred does not mean that there was fault or wrongdoing. I am sure that additional information will come to light in the future.

New articles following the December 25 incident also suggest some degree of disconnect or conflict between the Zoo’s executive management and animal care employees who are important to the Zoo and its functions. Certainly significant human resource and workplace functions are issues that every nonprofit board should be involve in to some extent. As I have written in other comments that new auditing pronouncements will now call on the independent auditor to engage the audit committee in discussions about human resource oversight.

The December 25 incident also may put the spotlight on how nonprofit boards are selected and operate in general. Nonprofit board members often in part are selected not only for their expertise, but also because of their ability to donate to or raise funds for the nonprofit. In my opinion, the ability to donate or raise funds does not by itself qualify a person to be a board member. The ability to donate or raise funds can be an added bonus; however, the board member should be selected primarily because of his or her ability to help oversee the operations and long-term planning functions.

People who serve on nonprofit boards typically volunteer their time and abilities without pay because of their interest in the benefits that the activities of the nonprofit provide to the community that is being benefited. Sometimes some people also serve on nonprofit boards because it can provide a degree of personal reputation stature and recognition. The Zoo incident should serve to remind all nonprofit board members that their primary functions and responsibilities is to the nonprofit, its community purpose and mission, its customers, its donors and its employees.

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