Answer an Important Question: Are Your Directors Independent?
Not-for-profit organizations that file IRS Form 990 must indicate the number of independent voting members or directors of the governing body. (This is entered on Parts 1 and VI.) The IRS is not the only group interested in these facts. Two other groups also focus on the number of independent directors: state attorneys general and prospective donors. All three groups believe that independent directors are the cornerstone of good governance. In other words, they believe independent directors are less likely to cause the organization to violate prohibitions on private benefit and private inurement.