OWL Board of Directors Code of Ethics

Owner: Director of Orgazational Strategy & Learning (DOSL) – with input from all Directors Audience: All OWL staff, board members, and stakeholders

Purpose

The OWL Board of Directors is committed to ethical governance, oversight, and fiduciary responsibilities. This Code of Ethics provides supplemental guidance to the Bylaws, fostering ethical conduct, decision-making, and collaboration to advance OWL’s mission.

Section 1 - Overview and Ethical Principles:

The OWL Board of Directors is committed to upholding the highest ethical standards in governance and oversight. Board members shall adhere to the duties of care, loyalty, and obedience, ensuring all actions align with OWL’s mission, bylaws, and Articles of Incorporation. This Code supplements the bylaws by providing guidance on ethical conduct, decision-making, and collaboration to achieve OWL’s mission.

Each OWL Board of Director member shall annually sign this statement, which affirms such person:

1. Has received a copy of this conflicts of interest policy,

2. Has read and understands the policy,

3. Has agreed to comply with the policy, and

4. Understands the nonprofit is charitable and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.

Board members pledge to:

1. Abide by OWL’s Articles of Incorporation, bylaws, and policies.

2. Act with reasonable care, good faith, and due diligence in all organizational affairs.

3. Disclose any potential conflicts of interest or information relevant to Board decisions promptly.

4. Uphold prudent fiscal management, ensuring accountability to stakeholders, funders, and regulatory bodies.

5. Maintain professionalism, courtesy, respect, and objectivity in all activities.

6. Work collaboratively to uphold the highest standards of conduct and assist fellow Board members in doing the same.

7. Act in the organization’s best interests, avoiding actions that serve personal or external organizational gain.

8. Ensure services are delivered equitably, without discrimination based on geography, political or religious beliefs, socio-economic status, gender, sexual orientation, race, age, disability, or other protected characteristics, in compliance with legal requirements.

9. Protect the confidentiality of sensitive information gained through Board service.

10. Respect diverse opinions and formally register dissent when appropriate.

11. Foster collaboration, cooperation, and partnership among OWL members and stakeholders.

Section 2 - Performance Evaluation:

Periodic evaluations of the Board of Directors and OWL Leadership Team will be conducted as outlined in Article IV, Section 13 of the Bylaws to ensure alignment with OWL's mission and governance standards.

Section 3 - Full Time Employee & Director Base Pay:

The OWL Directors are responsible for advancing the nonprofit’s mission efficiently and in alignment with its annual strategic goals and operating budget, under the governance and oversight by the OWL Board of Directors. OWL embraces the principles of collective leadership, fostering collective empowerment over hierarchical decision-making. To attract and retain the talent necessary for these responsibilities, the Board of Directors is committed to providing fair, reasonable, and transparent compensation packages for all OWL employees. Refer to the OWL Compensation Guidelines document for detailed procedures.

Section 4 - Financial Planning and Budgeting Principles

OWL is committed to sound financial planning that ensures long-term sustainability and mission impact. The Board of Directors approves the annual budget and any surplus allocations to maintain transparency, fairness, and financial health.

Budgeting Guidelines:

1. Deficit Budgeting: The Board may approve a deficit budget only if:

• Sufficient Operating Reserves exist to cover all obligations.

• The deficit funds a short-term investment with high mission impact (e.g., fundraising capacity, new programming).

• Deficit spending prevents long-term harm, such as staff reductions or service disruptions.

1. Surplus Budgeting and Use of Funds: If OWL generates a surplus beyond budgeted projections, the Board shall allocate funds based on the following priorities:

2. Restricted Funds – Must be used according to grantor/donor restrictions.

3. Surplus Fund (Rainy Day Fund) – Designed to cover strategic needs beyond routine operations.

   • Target range: 3-6 months of expenses

   • At least 50% of surplus funds must be allocated here if below target before funding other priorities.

4. Operating Reserves – Cash on hand to cover routine operations.

   • Minimum target: 6 months of average operating expenses

   • Surplus allocations may be made to replenish reserves if needed.

5. Employee Compensation & Bonuses:

   • Refer to the OWL Compensation Guidelines for details regarding bonuses.

6. Strategic Investments – Remaining funds may be allocated to mission- aligned initiatives such as:

   • Infrastructure improvements

   • Professional development

   • Research and development

   • Partnerships with aligned organizations

7. Governance & Oversight:

• The Treasurer calculates and reports Surplus Fund and Operating Reserve levels annually.

• The Board reviews and approves fund allocations based on financial trends and mission priorities.

• Budget Development & Approval:

  • The Leadership Team drafts the annual budget based on projected income and organizational needs.

  • The Treasurer reviews the budget before submission to the Board for final approval per OWL’s Bylaws.

• Transparency & Accountability:

  • The approved budget is shared with all employees.

  • Surplus allocation decisions are documented in Board minutes and overseen by the Board Chair.

1. Key Financial Targets at a Glance:

Fund Type	Purpose	Target Minimum	Use Cases
Operating Reserves	Covers routine expenses and cash flow gaps	6 months of operating expenses	Emergencies, revenue shortfalls, urgent needs
Surplus Fund (Rainy Day Fund)	Supports strategic needs beyond operations	3-6 months of expenses	Growth, innovation, expansion, investments

Section 5 - Fiscal Year Financial Reports

At the end of each fiscal year, the Director of Finance & Operations, with support from the Administrative Associate, shall review all financial accounts to ensure accuracy and compliance. This review includes:

1. Balance Sheet Accounts:

   1. Verifying cash accounts match bank reconciliations.

   2. Confirming fixed asset accounts reflect all purchases.

   3. Ensuring accounts receivable and payable balances are accurate and match outstanding amounts.

2. Income and Expense Accounts:

   1. Reconciling amounts received and expended.

   2. Verifying payroll expenses match payroll reports and comply with federal and state reporting requirements.

Once the year-end financial statements are finalized, reviewed, and approved by the Treasurer, no further entries or adjustments will be made for that fiscal year.

Tax Filings:

1. IRS Form 990:

   1. The Director of Finance & Operations (or an external CPA) shall prepare the annual IRS Form 990 and present it to the Board of Directors for review and approval before submission.

   2. The approved return shall be filed with the IRS by the annual deadline.

   3. A copy of the Form 990 will be shared with the North Carolina Center for Nonprofits and made publicly available as required.

2. Other Government Filings: The OWL Administrative Associate, under oversight by the OWL Finance & Operations Director, shall complete all additional filings required by North Carolina state agencies, including the tax board and attorney general’s office, and submit them by the appropriate deadlines.

Year-End Financial Reporting: The OWL Administrative Associate shall prepare and distribute the following reports to the Treasurer of the Board of Directors before the Annual Meeting:

1. Balance Sheet.

2. Statement of Income and Expenses.

3. Budget vs. Actual Report for each program with an established budget.

4. Organization-wide Budget vs. Actual Report.

5. Cash Flow Projection.

6. Any additional reports requested by the Board of Directors.

Section 6 - Fiscal Year Financial Reports

At the fiscal year end, the Director of Finance & Operations will review all balance sheet accounts including verification of the following balances: cash accounts match the bank reconciliations, fixed assets accounts reflect all purchases, and accounts receivable and payable accounts match outstanding amounts due and owed. The income and expense accounts review will include reconciliation to amounts received and expended and verification that payroll expenses match the payroll reports including federal and state reporting requirements. Once the final fiscal year-end financial statements are run, reviewed, and approved by the Director of Finance & Operations, no more entries or adjustments will be made into that year’s ledgers.

At the end of the fiscal year, the President (or outside CPA) will prepare the annual Return for Organization Exempt from Income Tax (IRS Form 990). The return will be presented to the Board of Directors for their review and approval prior to submission. The President will then file the return with the Internal Revenue Service by the annual deadline. Because the nonprofit is listed with the North Carolina Center for Nonprofits, a copy of said 990 Return will be sent by the IRS to the nonprofit verifier and available for review by the public.

All other appropriate government filings including those required by the North Carolina state tax board and attorney general’s office will be completed by the Director of Finance & Operations and filed with the appropriate agency.

The Director of Finance & Operations will also prepare annual financial reports for distribution to the Treasurer of the Board prior to the Board’s Annual Meeting. The reports will include: balance sheet, statement of income and expenses, budget versus actual report for each program which has an established budget, a budget versus actual report for the organization, cash flow projection, and any other requested reports.

Section 7 - Other Fiscal Policy Items:

• All cash accounts owned by the nonprofit will be held in financial institutions which are insured by the FDIC. No bank account will carry a balance over the FDIC insured amount.

• All capital expenditures which exceed one thousand dollars ($1,000.00) will be capitalized.

• No salary advances will be made under any circumstances. No travel cash advances will be made except under special conditions and pre-approved by the Director of Finance & Operations.

• Any donated item with a value exceeding ($100) will be recorded and a letter acknowledging the donation will be sent to the donor within 30 days of the receipt of the donation. All volunteer time shall be recorded as in-kind donations.

• The Board of Directors will periodically review the adequacy of its directors & officers liability insurance policy, as well as other applicable insurance policies the nonprofit may have or need.

Section 8 - Policy Review:

The Governance Committee of the Board of Directors shall review the Code of Ethics and Bylaws every three years, ensuring alignment with OWL’s mission, compliance with legal requirements, and incorporation of nonprofit best practices. Updates will be presented to the full Board for approval.

Section 9 - Conflicts of Interest:

Board members must disclose potential conflicts of interest and adhere to the procedures outlined in Article VIII, Section 12 of the OWL Bylaws. This ensures transparency and ethical decision-making in alignment with OWL's mission.

Section 10: Whistleblower Protections:

OWL is committed to maintaining a safe and transparent reporting environment where Board members and employees can report suspected ethical violations, misconduct, or legal noncompliance without fear of retaliation.

1. Reporting: Concerns shall be reported to the Chair of the Board or a designated Board member. If necessary, reports may also be directed to appropriate legal or regulatory authorities.

2. Investigation: The Board shall promptly and confidentially investigate all reports, taking corrective action as warranted.

3. Protections: Individuals reporting in good faith are protected from retaliation. Acts of retaliation are strictly prohibited and will result in disciplinary action, up to and including removal from the Board or termination of employment.

The Board shall enforce whistleblower protections and ensure all concerns are reviewed and resolved in compliance with applicable laws and organizational policies.