Let’s be blunt: If your CEO has to get board approval to purchase a $1,000 budgeted item – or worse, toilet paper – your association has a governance problem.

That’s not an exaggeration. One executive who responded to our 2025 WAV Group Association Governance Study said they finally gained the authority to buy toilet paper without board sign-off. Another shared that they’re still required to run every invoice past two finance committee members before processing a payment – despite leading the organization and delivering responsible financial management for nearly a decade.

It would be funny if it weren’t so damaging.

Redundant approval processes are slowing progress

Nearly 40% of associations require a second board approval for expenses that have already been approved in the budget. In small and mid-sized organizations, this extra layer of scrutiny can stall initiatives for weeks or even months. In one case, a copier contract cost the association 8% more because it took four months to get final approval. That’s not sound oversight – that’s expensive inefficiency.

This kind of micromanagement doesn’t just waste time and money. It signals a deeper issue: a lack of trust in the CEO to execute the plan the board already approved and maybe even a lack of understanding of responsible fiscal management. Board members have a fiduciary responsibility to look out for the best interest of their organizations, but that doesn’t mean they re-orchestrate a decision on every budgeted item. It does mean, however, that board members need to pay close attention to the finances of their organization, asking tough questions so they are clear on how financially healthy the organization is. It means requiring a monthly financial report and ensuring the Form 990 to the IRS has been submitted to maintain the organization’s not for profit status. 

Financial policy isn’t a substitute for leadership

Yes, fiduciary responsibility matters. But oversight should be strategic, not microscopic. When associations cap CEO spending authority at $1,000 or less – even for budgeted items – they’re not protecting the organization. They’re handcuffing the very person they’ve hired to lead.

More than half of associations say their current expenditure approval process doesn’t allow them to move as quickly as they need to. That’s a huge problem when the value proposition and membership interest for Associations is being questioned.  

 Trust your CEO to lead or NOT

Boards shouldn’t have to weigh in on every single expenditure. If you’ve approved the budget and aligned on the strategic plan, then let your CEO do the job. That doesn’t mean writing a blank check – it means putting smart guardrails in place and reviewing progress at regular intervals. It also means equipping your treasurer with the training and access they need to be a true financial partner, not a gatekeeper. Treasurers need to have view only access of the bank accounts, for example. They need to be able to log-in and look at the actual cash balances to be sure the financials shared match with the cash in the bank. 

If you have worries that your Association Executive is not acting in the best financial interests of the organization, you need to address that issue right away. First, quantify why you think they are not acting in the best interests of your organization. To do that, leaders must have a strong grasp on cash flow, capital reserves, and large expenditures. While volunteers should not be privy to the individual costs of employees, it is important to ensure that employee costs are in alignment with membership trends. If the organization is losing membership, are costs calibrating with revenues decreases? While most membership numbers do not seem to be declining significantly, it is important to keep an eye on them and reduce operating costs commensurate with the declines. 

Time to evolve your approval policies

If your board is spending more time reviewing receipts than reviewing results, it’s time to rethink the system. Here’s where to start:

  • Set realistic approval thresholds that reflect your CEO’s role and the size of your organization.
  • Eliminate redundant approvals for already budgeted expenses.
  • Shift the focus from micromanaging line items to evaluating strategic outcomes.
  • Train volunteer leaders on their financial oversight responsibilities so they understand what matters – and what doesn’t. Make sure you have leaders that understand how to read a profit and loss statement and balance sheet. They cannot provide sound financial oversight without those core skills. 

Associations don’t have the luxury of slow, outdated governance. Members expect relevance, responsiveness, and results. Internal processes need to reflect the speed of change in real estate and support nimble decisions, not stand in the way.

Want to see how your Association stacks up?
Download the full 2025 WAV Group Association Governance Effectiveness Study on our website and get a deeper look at where the most effective associations are making bold changes. 

If you would like help reviewing your financial management, budgeting and board oversight processes, WAV Group is here to help:

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