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.     

Board members' influence on the government-nonprofit relationship

This study examines whether, how, and under what conditions nonprofit boards of directors influence the government and voluntary sector relationship. The survey responses of executive directors and board presidents in a randomly selected sample of 400 nonprofit organizations indicate that boards are not bystanders in the contracting relationship with government. Rather, many boards play multiple roles, simultaneously enhancing interdependence and maintaining the boundary between state government and nonprofits.     

Called to order: A board president in trouble

This is a fictionalized case based on real events. It is intended as a teaching tool to stimulate discussion about procedural issues in nonprofit governance; board roles and responsibilities; communications; and relationships between boards, chairs, and executives, particularly in the context of smaller organizations. It is meant to support sessions on nonprofit boards and governance in introductory courses on nonprofit management or for use in workshops with new or less experienced executives and board members. Set in an organization engaged in cultural exchange, the case can be used in introductions to nonprofit management, arts administration, or international nongovernmental management.     

What Nonprofit Executives Want and What They Get from Board Members

In theory, nonprofit boards of directors exist to perform mission‐setting and oversight functions that help to ensure organizational accountability. Yet there is evidence that board behavior often falls short of this ideal. Using survey data from a sample of 241 executive directors of nonprofit agencies, we investigated whether nonprofit boards are meeting executive directors’ expectations, and if not, what factors explain this? We find that although board behavior tends to align closely with executive directors’ preferences for involvement in administration and management tasks, there is a greater disconnect between board behavior and executive directors’ preferences for involvement in mission‐setting and oversight duties. Factors that mitigate this gap include organizational professionalization and stability, whereas more extensive reliance on government funding exacerbates it. Female executive directors experience a greater disconnect in their preferences for board involvement and actual board involvement than male executive directors. We conclude by discussing the implications of our findings for both theory and practice.     

Managing stakeholder relationships and nonprofit organization effectiveness

This research examined how nonprofit organizations manage their relationships with stakeholders and how these practices relate to perceived organization effectiveness. We conducted semistructured, open‐ended interviews with executive directors of nonprofit organizations (NPOs) to discover whom they see as their stakeholders, the types of expectations they encounter from stakeholders, and the practices they use in managing stakeholder relationships. The two nonprofits that were evaluated as most effective used a consistent, thematic rationale in dealing with stakeholder issues: one organization discussed its actions in terms of its mission and core values, the other based its actions in terms of building relationships and networks. Our study suggests that organizations that ground their external relations in issues that are recognized as good nonprofit management, and do so consistently across stakeholder groups, will tend to be rated as more effective by multiple, external evaluators.     

Social Class and a Division of Labor within the Corporate Elite: a Note on Class,Interlocking, and Executive Committee Membership of Directors of U. S. Industrial Firms*

Upper-class directors of major industrial companies are directors of more corporations than are the non-upper-class directors, but they are less likely to serve on executive committees of corporate boards. This may indicate that there is a class-based division of labor in which the upper-class directors are more concerned with inter-organizational relationships and with the functioning of the economy as a whole, and that non-upper-class directors are concerned with day-to-day operations of individual companies.     

Into the Fire: Boards and Executive Transitions

Managing the transition an organization undergoes when one chief executive leaves and another is hired is both a defining responsibility and one of the most critical jobs a governing board faces. CompassPoint Nonprofit Services, which consulted to twenty‐eight organizations going through such transitions, found that three characteristic threats to successful transitions for nonprofit boards emerged: (1) boards underestimate the risks and costs of bad hires; (2) boards are typically unprepared for the task; and (3) boards too often focuson the problems in hiring new CEOs and fail to make full use of the opportunities in CEO transitions. This article describes the development of services to help organizations in transition, gives results from the first two years of work, and offers suggestions for support to boards and for future research.     

Roles and Responsibilities of Community Nonprofit Boards

In this study, roles and responsibilities associated with nonprofit boards of directors were supported by a framework inclusive of Strategic Activities, Operations, and Resource Planning roles. This framework can be valuable for paid staff and volunteers in understanding the broad scope of the work of nonprofit boards and practical applications such as agenda setting for board meetings and designing board training and development activities.     

A Collaborator Profile for Executives of Nonprofit Organizations

This study involving ninety‐two nonprofit executive directors who engaged in separate interorganizational collaborations investigated the relationship between a select number of individual characteristics (personality and demographic) and perceived collaboration outcome (successful or unsuccessful). The collaborator profile that resulted suggests that directors who are predisposed to perceiving their respective collaborations as successful are extravert, feeling males who have high role ambiguity and low role boundary occupational stress. Given the increasing need for nonprofit organizations to collaborate with other organizations, it is important for nonprofit executives and their boards to be cognizant of some key factors that can lead to successful interorganizational collaborations.     

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.     

A contingency approach to nonprofit governance

A number of contingency factors may be relevant for effective nonprofit organizations and their boards. Although all boards must fulfill certain critical roles and responsibilities, strategic choices can be made about adopting different governance configurations or patterns. These choices can be meaningfully informed by understanding organizational contingencies such as age, size, structure, and strategy—and, even more important, by external contingencies and environmental dimensions such as degree of stability and complexity. This article extends or layers contingency thinking beyond its traditional focus on an alignment between the external environment and the organization's structure to focus as well on the alignment of the organization's governance configuration with its structure and environment. Structural contingency theory in general, and specifically within nonprofits, is reviewed. Two cases are presented of organizations that used an approach based on contingency theory in an action research process to examine and change their governance configurations. The steps they followed may help other nonprofits adapt their governance structures and practices and fulfill their responsibilities for board assessment and reflection.     

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.     

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.     

Inclusive Governance Practices in Nonprofit Organizations and Implications for Practice

An inclusive board seeks information from multiple sources, demonstrates an awareness of the community and constituents that benefit from and contribute to the organization's services, and establishes policies and structures to foster stakeholder contributions. This research investigated the prevalence of inclusive governance practices and its relationship to board composition, diversity attitudes, and recruitment practices. Fifty‐six executive directors and forty‐three board members representing sixty‐two nonprofit organizations returned a mailed survey (29 percent response rate). The study profiled two organizations that represented different styles of inclusive governance. The survey, part of a larger study, contained questions about inclusive practices, board composition, attitudes toward diversity, and recruitment practices. Most organizations indicated that they operate with inclusive governance practices. The organizational profiles provide a picture of boards that used different strategies to accomplish the goal of inclusivity. Boards that use more inclusive practices were not necessarily heterogeneous in board member composition. Inclusive boards were more inclined to be sensitive to diversity issues and used recommended board recruitment practices. The existence of a task force or committee on diversity was also significantly associated with a more inclusive board. Nonprofit organizations must consider their philosophy on stakeholder involvement, recognizing that different strategies lead to different levels of stakeholder involvement.     

The governance of nonprofit organizations: Law and public policy

Who should have the right to set the objectives of nonprofit organizations, hire their managers, set compensation standards, and in general control these organizations? Current law and public policy do not provide answers to these questions. Often, nonprofit organizations are controlled by managers and members of the boards of directors or trustees (many of whom are appointed by management). The goals of these individuals may not best serve the interests of those who support the operation of nonprofit organizations. This article proposes a legal and policy framework for empowering consumers, donors, and sponsors—those who have an economic demand for the nonprofit form of organization. The framework establishes a formal status of membership, accords standing in the court of law to members, enhances direct information dissemination by nonprofit organizations, and empowers state-sponsored agencies to support and oversee nonprofit organizations.     

Minding the Gap: An Exploratory Study Applying Theory to Nonprofit Board Management of Executive Transitions

VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations - Nonprofit boards of directors are responsible for overseeing executive transitions, and the practitioner literature is...     

What you don't know can hurt your community: Lessons from a local United Way

This paper describes how a controversial executive compensation package approved by a local United Way agency eclipsed the agency's long‐standing record and reputation of being a top fundraiser and pillar of the community. Using the framework developed by P. Connelly and York (2003), this case study illustrates how the lack of leadership and adaptive capacity within the board of directors, coupled with questions and speculation about managerial capacity, contributed to a highly visible scandal that resulted in the loss of the agency's chief executive officer, the resignation of the chairman of the board of directors, an internal investigation, and ultimately, a federal investigation. Not only did these events hurt the agency, which was forced to eliminate programs and cut staff, but these events hurt the annual campaign, which declined by more than 30 percent, resulting in substantial cuts in funding to dozens of nonprofit organizations. The findings from this study illustrate the importance of building strong governing boards that focus on both organizational processes and performance outcomes. They also highlight how important it is for the flagship charitable institutions to model best practices and invest in their own capacity.     

Revisiting Agency and Stewardship Theories

Using principal–agent theories, this study examined differences in the perceptions of nonprofit chief executive officers (CEOs) and board chairs on key governance aspects, including board performance, leadership, satisfaction with diversity, and board meetings. Using data from the CEOs and board chairs of 474 nonprofit organizations, we found statistically significant differences in the governance perceptions of these leaders of nonprofit organizations. The findings provide support for an agency theory explanation about the differing interests of principals (board chairs) and agents (CEOs). The findings suggest that these two sets of nonprofit actors frequently operate from different perspectives, potentially affecting the governance of their organizations.     

Latino Faces,Corporate Ties: Latino Advocacy Organizations and Their Board Membership

Although they have increased exponentially since the 1960s, social scientists know little about ethnic advocacy organizations. These nonprofits are important bridges between underresourced communities and mainstream funding organizations and their directors are established ethnic leaders. Sociologists study interlocking directorates—or shared board membership—to understand how organizations fit together within broader social networks. Network concepts, particularly the theory of institutional isomorphism, suggest that organizations are likely to be similar to the extent they are connected and operate within a common organizational field. We apply this logic to Latino advocacy organizations to examine the underlying source of cohesion across this ethnic field. We ask whether the organizations are tied by interlocking directorates of ethnic elites who sit on their boards of directors or if board members' common affiliation with other elite institutions creates the structural conditions that facilitate potential ideological or behavioral similarity. A social network analysis of five prominent Latino advocacy organizations reveals support for both hypotheses: Latino board members are both embedded in ethnic‐based networks and entrenched within elite organizational webs. This suggests that ethnic elites who sit on the boards of Latino advocacy organizations are also corporate elites, selected for the social capital they bring to these nonprofits.     

The Role of Alumni in Baccalaureate Social Work Education

This article discusses the results of a 1993 national survey of undergraduate social work program directors on the role of alumni in their programs. Respondents indicated that they involved alumni, primarily as field supervisors, campus speakers, and members of curriculum advisory boards. Only 20% of respondents reported social work-specific alumni organizations; most often these were institutions with public affiliations, joint MSW-BSW program structures, and enrollments exceeding 10,000. Having a social work alumni organization was associated with higher rates of alumni participation in field supervision, mentoring, linkage and networking activities, recruitment, and curriculum advisory boards. A profile of the typical social work alumni organization is presented, and the need for more programs to initiate such organizations is examined.