Board Accountability: Lessons from the Field

Accountability has become a major issue in the nonprofit sector. Numerous external and internal approaches to strengthening performance in this area exist, and many nonprofit boards expect their executives to account foruse of their organizations' resources. However, few boards apply any such expectations to themselves. Qualitative analysis of records from interviews, consultations, and meeting observations with 169 board members of thirty‐four diverse nonprofit organizations revealed six sets of practices that foster board accountability. They include setting clear expectations and standards for the group and for its members, actively using policies regarding conflicts of interests, identifying and staying focused on priorities, maintaining strong two‐way communications directly with constituency groups, conducting assessments of meetings and board performance, and experimenting intentionally with new approaches to their work. The experiences of these boards provide numerous examples of practical steps that others may consider when they seek to increase the value they add to their organizations as well as to strengthen public trust.     

Exploring the association between board and organizational performance in nonprofit organizations

Note: This study investigated six dimensions of effective board performance, as suggested by Chait, Holland, and Taylor (1991), in relation to three theoretical explanations (agency theory, resource dependency theory, and group/decision process theory) of how board governance activities potentially influence organizational performance. Survey research findings revealed that strategic contributions from the board are more robust in organizations with higher financial performance. In addition, organizations that are judged to be higher performing also reported having high‐performing boards across all dimensions. In particular, the interpersonal dimension provided a unique explanation of judgments of organizational performance.     

Behavioral Determinants of Nonprofit Board Performance

There is an increased awareness that the performance of boards (good governance) is not only determined by structural determinants but by behavioral determinants as well. These behavioral determinants might be particularly important for public and nonprofit governance, where the role of the board is more diffuse and heterogeneous than in corporate governance. Here we investigate how social dynamics within boards in secondary education influence their performance. We follow a concise model that includes cognitive conflict, the use of expertise, effort norms, and social cohesion as determinants of board task performance. A survey among all secondary schools in the Netherlands serves as the empirical underpinning for this process‐oriented model of good governance. We show that the behavioral determinants have different effects on the control task and advice task of boards. Also, we find that cognitive conflicts in supervisory boards do not lead to less but rather to more social cohesion within boards. Building on these findings, we suggest a revised model of the behavioral determinants of nonprofit board performance.     

Effective boards: how executive directors define and develop them

There is growing recognition in the nonprofit field that the executive director has a key role in determining whether the board of directors will function effectively. To aid executives in this vital role, two recent studies defined a "good board" from the point of view of two samples of executive directors of community agencies, then sought factors related to board performance as measured by this definition. In interviews, executives whose boards scored higher than their peers on this performance measurement related how they work with their boards in such areas as recruitment of new members, financial management, fundraising, and leadership development.     

Sociology of School Boards: A Social Capital Perspective

School boards have received little attention in sociology of education. Drawing on organizational sociology, a model of school board social capital is proposed that treats brokerage (external ties) and closure (internal ties) as the key dimensions of board functioning. The model brings together insights from limited research on school boards concerning members' internal and external ties and recasts them as the building blocks of a unifying theoretical framework. It also proposes specific performance outcomes at the district level. The model is tested using the data from a representative sample of Pennsylvania districts. The analysis not only explores brokerage and closure patterns among school boards, but also examines their implications for academic outcomes. Findings suggest that eighth grade reading and mathematics performance are highest in districts, where boards exhibit high levels of both brokerage and closure, and lowest in districts, where brokerage and closure are both low.     

Nonprofit Board Balance and Perceived Performance

Based on prior literature, this article offers a reconciliation of the core roles of nonprofit boards and aligns these role‐sets with organizational theories. A survey instrument was developed and validated to measure each of four role‐sets (monitoring, supporting, partnering, and representing) to assess whether emphasis on specific roles affects board members’ perception of performance. Our study of nonprofit boards in a midsized midwestern city found that balance across the role‐sets was associated with effective organizational performance. Furthermore, when board members describe any of the four role‐sets as deficient, they perceive the organization as less effective. The results of the study provide practitioners with a validated survey tool that provides nonprofit boards with a method to identify which roles their board emphasizes.     

Leadership within Australian voluntary sport organization boards

This article applies leader‐member exchange theory to the study of dyadic relationships between leaders (board chairs and paid executives) and members (volunteer board members) within the boards of Australian voluntary sport organizations. The article specifically examines leader‐member exchanges within a sample of six Queensland State sport organizations and their relationship with board performance. It was found that leadership within voluntary sport organization boards emanates from either board chairs or executives and that when the individuals fulfilling these roles are able to develop a mature working relationship, the board's ability to perform is enhanced. These findings extend our understanding of the importance of leadership roles held by volunteers and paid professionals for the achievement of organizational outcomes.     

Board development practices and competent board members: Implications for performance

This study explores underlying assumptions about board development practices in nonprofit governance. Specifically, a model was developed to determine if using recommended recruitment, board member orientation, and evaluation practices resulted in more competent board members and if the presence of these board members led to better board performance. The sample consisted of 1,051 survey responses from CEOs and board chairs representing 713 credit unions. As member‐benefit nonprofit organizations, credit unions rely almost exclusively on voluntary board members in an oversight capacity. Results support the contention that board development practices lead to more capable board members, and the presence of these board members tends to explain board performance. The study advances the understanding of nonprofit board development practices by further defining the concept and proposing an empirically tested assessment strategy. Furthermore, the findings support using specific recruitment practices that should strengthen nonprofit boards.     

Local Unit Performance in a National Nonprofit Organization

Board members and chief professional officers (CPOs) from the local units of a national nonprofit organization completed questionnaires that revealed (1) statistically significant differences as to what functionsand activities each believes the other should do and does perform, (2) areas of possible tension between boards and their CPOs, and (3) those activities with significant correlations to common performance measures established by the national organization. Both board members and CPOs believe boards should be doing more than they do, with CPOs being more critical of board members than they are of themselves or than board members are of them. There is significant tension between boards and CPOs regarding responsibility for some operational issues. However, neither the presence nor absence of tension was significantly correlated with the effectiveness of the organization. Finally, self‐reported measures of effectiveness correlated with external measures developed by the national organization, providing some evidence that self‐reported measures may be valid.     

Self-assessment by nonprofit boards

Can nonprofit boards conduct accurate and trustworthy evaluations of their own performance? Factors that limit trustee self-assessments include problems with available instruments as well as with trustees' critical abilities. Drawing upon previous research that identified six dimensions of board competencies, the author developed and field-tested a new instrument for use in board self-assessments. Information on the reliability and validity of this approach is presented, and implications are drawn for board efforts to monitor and appraise their performance.     

Board performance and organizational effectiveness in nonprofit social services organizations

This article examines the tasks and responsibilities of nonprofit boards of directors and explores the relationship between board performance and organizational effectiveness. Thirty-three activities in nine areas of board responsibility were examined through questionnaires and interviews with board members and chief executive officers of sixteen nonprofit organizations serving developmentally disabled adults. Rankings of organizational effectiveness were determined using external evaluators and accreditation surveys. A significant relationship between board performance and organizational effectiveness was found, and the board activities most strongly correlated with organizational effectiveness are reported, including policy formation, strategic planning, program monitoring, financial planning and control, resource development, board development, and dispute resolution.     

The Impact of Board Diversity and Expertise on Nonprofit Performance

This study examined the impact of board of director characteristics on nonprofit performance. Using data collected through a survey of nonprofit colleges and universities, the author provides evidence that specific board member characteristics are vital in shaping the financial and nonfinancial success of nonprofit institutions of higher education. Results indicate that both board member diversity and expertise are associated with better‐performing organizations. This work makes important initial forays into the relationships between board of director qualities and nonprofit performance. Although limited by the relatively small sample of colleges and universities, this study is unique in its ability to analyze nonprofit boards and both financial and nonfinancial performance measures.     

Nonprofit boards and perceptions of funding

The study presented in this article examines the extent to which board characteristics and activities are associated with the executive director's level of certainty about future funding, using a sample of 127 human service agencies. The executive directors of agencies with low levels of funding adequacy expressed more certainty about future funding when their boards were more expert, influential, and involved in planning and fundraising activities. For agencies with more adequate funding, board expertise and activities were associated with lower levels of perceived funding certainty. This articles argues that, rather than improving agency performance, boards serve a homeostatic function, acting in crisis situations to return their organizations to stable equilibria.     

Board practices and board effectiveness in local nonprofit organizations

This study of sixty-four locally governed nonprofit charitable organizations used a social constructionist perspective to investigate the relationship between the extent to which nonprofit boards use prescribed board practices and stakeholder judgments of the effectiveness of those boards. A social constructionist perspective implies that different stakeholders use and evaluate different kinds of information in making judgments about board effectiveness. The results suggest that there is wide variation in the use of the prescribed board practices, that judgments of board effectiveness often differ substantially, and that chief executives' judgments of the effectiveness of their boards is moderately related to the extent of use of recommended board practices.     

Is all well in the neighborhood? Conflict on neighborhood boards in Milwaukee

Neighborhood organizations have become more important players in urban areas in recent years due to a renewed interest in social capital and an emphasis on the continuing development of community. With this elevated status comes more responsibility for the delivery of services to citizens and scrutiny by these very citizens, the press, and government officials. Much of what we know about neighborhood organizations comes from our observations of board deliberations. Through these deliberations board members make decisions that affect neighborhood constituents. In this study we examine the context in which neighborhood boards in the city of Milwaukee, Wisconsin, make decisions. Using theory borrowed from the literature on local government boards, we develop a series of testable hypotheses relating to the level of conflict on these boards. Our findings indicate that conflict is relatively low across boards in Milwaukee; however, the number of board member and certain behavioral variables explain a significant amount of the variance in the level of conflict.     

Leader‐member exchanges and board performance of voluntary sport organizations

Using leader‐member exchange theory developed by Dansereau, Graen, and Haga (1975), this chapter analyzes the dyadic relationship between leaders (board chairs and paid executives) and members (volunteer board members) within the boards of Australian voluntary sport organizations. The chapter specifically examines the quality of leader‐member exchanges that exist within a sample of thirty‐four Queensland State Sporting Organizations and their relationship with board performance. It was found that board chairs and executives perceived the quality of their leader‐member exchanges to be higher than their respective relationships with board members, and that higher‐quality leader‐member exchanges among all three possible pairings of executives, board chairs, and board members were positively related to higher levels of board performance. The chapter discusses implications and directions for further research into leader‐member exchanges within voluntary sports organizations.     

Female leaders and board performance in member‐serving nonprofit organizations

Despite an active stream of “good governance” research, there is not yet much nonprofit scholarship examining how the gender composition of a board or its leadership relates to board performance. This article helps to fill this gap, focusing on the governance practices of US‐based nonprofits serving a domestic or international membership. A structural equation model finds that the presence of female leaders relates to the performance of nonprofit boards both directly and indirectly through these leaders' presumed influence on board characteristics and operation. This research advances the field by empirically testing a longstanding theory that board performance is both multidimensional and contingent on the market and labor environment, organizational capacity and other characteristics—in this case, gender dynamics. We find there are some positive relationships between female board leadership and clearly defined measures of board performance. These findings also suggest that a strategy to balance a board's gender may serve many nonprofits, but gender representation works in tandem with other board characteristics.     

The effects of governing board configuration on profound organizational change in hospitals

This study extends the literature on governing boards and organizational change by examining how governing board configurations have influenced profound organizational change in U.S. hospitals, and the conditions under which such change occurs. Hospitals governed by boards that more closely resembled a corporate governance model were more likely to experience positive changes such as diversification and merger and less likely to undergo negative changes such as closure. Organizational performance influenced change, but largely independent of governance configurations. Only in the case of closure did we find that governance configuration operated jointly with organizational performance.     

Token Presence or Substantive Participation? A Study of Labor Trustees on Pension boards

In contrast to their absence from corporate boards in North America, labor representatives do have a seat on many pension boards. Given the lack of research on the role of labor participation in these fora, this study reports findings from a survey of labor trustees. We find that labor trustees make greater contributions to procedure-oriented processes such as information sharing, rule-making and rule interpretation; and, fewer contributions to investment-oriented processes such as investment decisions, fund performance and manager selection. Gender does not seem to matter in explaining participation in board activities. Accountability in terms of a requirement to report back to their union did increase labor trustee contribution but only to procedural issues, not investment issues. Short board tenure, lack of multiple labor seats and lack of training appear to limit labor trustees’ contribution to investment-based issues. Prior exposure to pension issues, and longer tenure appear to increase contributions to procedure-based issues. Exclusionary board dynamics hinder both types of contributions by labor trustees. These findings suggest that labor trustees do take advantage of their position to make procedural contributions but they find it hard to expand into newer, non-traditional roles such as investment-related activities of the Board.