Board Attributes and Processes,Board Effectiveness,and Organizational Innovation: Evidence from Nonprofit Organizations

The purpose of this study was to explore the relationship between boards of directors and innovation in nonprofit organizations. The results showed that not only board attribute variables and board process variables were directly related to innovation, but they also had a potential to affect innovation and capacity for innovation indirectly—through board effectiveness. Board culture (critical questioning), social capital (structural and cognitive), human capital, and diversity in industrial background were significantly related to innovation, accounting for 29.8% of its variance. Board culture (decision-making process and critical questioning), social capital (structural and cognitive), cohesiveness, and human capital were significantly related to capacity for innovation, accounting for 49.8% of its variance. The mediating effect of board effectiveness was partially confirmed. The effects of board culture (critical questioning), cognitive social capital, and human capital on innovation and capacity for innovation were either partially or fully transmitted through board effectiveness. Based on the results of this study, practice implications are discussed. The author wants to thank three anonymous reviewers for their constructive feedback and suggestions for improving the manuscript and Jinn Jonp (JJ) Bau, Ph.D. from OIBR at the University of Georgia for helping with statistical analyses.