Accounting Technician II Practice Test

Governance structure and fiduciary oversight define who makes decisions on behalf of an organization. Not-for-profit organizations are typically guided by a board of directors that sets policy, approves budgets, hires senior management, and monitors performance to ensure the mission is carried out. Trustees often oversee specific assets or endowments, acting as fiduciaries to protect resources and ensure funds are used in accordance with donor restrictions and the organization’s purposes. Because these entities don’t have owners, the board exercises decision-making on behalf of the people or communities the organization serves.

For-profit corporations also have boards of directors, but the term trustees isn’t standard in that context. Sole proprietorships are owned and run by a single person with no separate board or trustees. Government agencies operate under a different governance model with appointed officials and civil-service staff, rather than a board-and-trustee framework.