International Charities Not-for-Profit Governance – The Expectation Gap

Abstract

Although not-for-profit entities are a significant contributor to international social responsibility, as well as employment and GDP, this research shows a significant lack of accountability via their annual report, and this has created an expectation gap of information to potential donors. Although most presented audited financial information, in terms of governance, the information had large gaps, which would be unacceptable at a listing corporation level. Not-for-Profit (NFP) entities on an International basis play a significant role in world economies in relation to welfare, economic growth and employment (OECD 2009). This paper explores the governance mechanisms used to monitor and control these entities – or a lack thereof. The question explored is how much control is exercised by mainly voluntary directors in a sector dominated by time and budgetary constraints. International NFP entities were analysed for their corporate governance in terms of accountability in their annual reports, which also includes analysis of the board of directors, to enable the expectations gap to be closed.