Board and Governance Training for Microfinance Institutions Toolkit

This document introduces good governance practices for MFIs. It is meant to serve as a guide for a MFIs board of directors and management. The guide is divided into eight sections that cover:

• Need for good governance practices and its benefits;
• Models of governance and issues that effect the board of directors;
• Roles and responsibilities for the board of directors including:
  • Boards responsibility for preserving the institutions mission;
  • Board management and self governance;
  • Mechanisms for board members to maintain continuity of history, institutional knowledge, and good governance;
  • Structure of the board;
  • Principles and rules governing board meetings;
  • Mechanisms for self appraisal of the governance performance.
• Relationship between the board of directors and the executive officer;
• Boards role in the development of institutional policies;
• Financial and operational fiduciary responsibilities of the board of directors and the challenges in monitoring performance;
• Boards role in strategic planning with examples of strategic decisions that a well-managed and profitable MFI board may consider;
• Practical tips and advice for good governance.

Finally, the toolkit suggests an approach that allows MFIs to build their governance framework around their mission, and to ensure that it is well-suited to the organizations size, culture, people, traditions, and history. The toolkit also lists several sample documents for the use of a MFI board.