Checklist: disclosing expenses

By governance expert Rodney Buse

There is a strange debate going on in the wake of the MPs' expenses scandal earlier this year. Although you may not know what a senior manager's salary is, some argue that you have a right to know what his or her total expenses are.

It is not the absolute amount of expenses that matters, because that reveals nothing about their legitimacy. More important are the content of the expenses policy, the question of whether that policy is being followed and how expenses claims are being independently validated.

These issues are all the province of reputational risk, so they would normally fall within the remit of an audit and risk committee. It adds a lot of weight if independent members serve on these committees.

The public's trust and confidence will be best maintained by structures that transparently validate expenses policies and claims. Organisations need to show that their expenses are entirely necessary and exclusively used to meet charitable purposes. If your organisation published its expenses policy and practices, would they stand up to public scrutiny?

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