List 100 governance checks for financial bonuses in NGOs.

Here’s a comprehensive list of 100 governance checks to help ensure financial bonuses in NGOs are ethical, transparent, and aligned with organizational goals and donor expectations. These checks span policy, compliance, transparency, accountability, internal controls, and more.

Policy & Framework (1–15)

1. Existence of a written bonus policy
2. Board approval of the bonus policy
3. Annual review of the bonus policy
4. Consistency of the policy with the NGO’s mission
5. Alignment with local labor and tax laws
6. Limitations on percentage of total salary as a bonus
7. Criteria for bonus eligibility clearly defined
8. Performance metrics clearly defined and measurable
9. Separate policies for senior executives vs. junior staff
10. Risk assessment procedures included in policy
11. Donor compliance considerations explicitly stated
12. Conflict of interest clause in the bonus policy
13. Clause ensuring bonuses do not derive from restricted funds
14. Appeals mechanism for bonus disputes
15. External legal review of policy

Board & Oversight (16–30)

16. Bonus decisions subject to board oversight
17. Regular board review of bonus allocations
18. Establishment of a compensation committee
19. Independent members on the compensation committee
20. Recording bonus decisions in board minutes
21. Board review of performance appraisals used for bonuses
22. Board approval for bonuses exceeding a set threshold
23. Annual report to the board on bonus allocations
24. Separation of duties between performance evaluation and bonus approval
25. Disclosure of bonus recipients to the board
26. Use of third-party advisors for executive compensation
27. Avoidance of bonuses to board members
28. Periodic board training on ethical compensation
29. Limits on discretionary bonuses
30. Board reviews alignment with market norms

Performance & Appraisal (31–45)

31. Objective performance appraisal process
32. Appraisals tied to KPIs linked to the strategic plan
33. Appraisals documented and verifiable
34. Multi-rater (360-degree) feedback mechanisms
35. Differentiation between individual and team performance
36. Clear documentation of bonus-triggering achievements
37. Independent audit of performance ratings
38. No bonuses for failure to meet minimum KPIs
39. Adjustment for partial-year performance
40. Justification memo for any discretionary bonuses
41. Use of non-financial metrics (impact-based)
42. Annual review of performance scoring models
43. Linkage to organizational risk management
44. Review of performance incentives by HR
45. HR training on fair appraisal systems

Funding & Donor Compliance (46–60)

46. Donor approval for bonuses paid from grant funds
47. Clear documentation if bonus comes from unrestricted funds
48. Prohibition of bonus payment from emergency funds
49. Segregation of donor funds from bonus pools
50. Bonus policy disclosure in donor proposals
51. Bonus figures included in budget narratives
52. Review of donor agreement terms before bonus issuance
53. Communication with donors about bonus policies
54. No retroactive bonuses from expired funding
55. Documentation of donor consent (if required)
56. Transparency in donor reporting on staff compensation
57. Internal memo confirming fund source compliance
58. Donor representative oversight (if applicable)
59. No bonuses derived from in-kind contributions
60. Budgetary ceilings set for bonuses by project

Internal Controls & Audit (61–75)

61. Internal audit of bonus calculations
62. Segregation of duties between HR, Finance, and Directors
63. Independent verification of performance results
64. Bonus payment authorized by at least two executives
65. Bonus amounts reconciled with payroll reports
66. Periodic spot checks of bonus records
67. Fraud risk assessment for bonus process
68. Bonus data included in annual internal audits
69. Access restrictions to bonus decision systems
70. Bonus transaction logs maintained and reviewed
71. External audit includes review of bonuses
72. Whistleblower protection for bonus fraud reports
73. Internal control policy addressing bonus irregularities
74. System for employees to report bonus policy violations
75. Post-payment bonus reviews for anomalies

Transparency & Reporting (76–90)

76. Disclosure of bonus policy on website
77. Public disclosure of senior executive bonuses
78. Annual bonus report to stakeholders
79. Inclusion of bonuses in audited financial statements
80. Reporting of bonuses in NGO annual report
81. Disclosure of bonuses to staff (non-nominal)
82. Donor reporting includes total bonuses paid
83. Explanation for unusually high bonuses
84. Transparency on bonus-related disputes
85. Tracking of bonus-related complaints
86. Disclosures follow relevant NGO accounting standards
87. Donor-specific reporting templates include bonuses
88. Availability of bonus data for public scrutiny
89. Public explanation of how bonuses align with impact
90. Social audit of bonus practices (if applicable)

Ethics & Culture (91–100)

91. Bonus policy reflects organizational values
92. Periodic ethics training for leadership
93. Regular staff feedback on bonus fairness
94. Non-discriminatory access to bonus eligibility
95. Prevention of favoritism in bonus allocations
96. Surveys assessing staff perception of fairness
97. Mechanism for anonymous feedback on bonuses
98. Inclusion of gender equity in bonus reviews
99. Review of bonus policy impact on morale
100. Culture of impact-driven rather than profit-driven rewards