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.     

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.     

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.     

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.     

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.     

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.     

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 propensity of governing boards to plan

This article examines the relationship between board characteristics and formal organizational planning in forty-four nonprofit organizations. The study found that ongoing and beginning planners were more likely than those with no planning experience—or those that had abandoned planning after an initial experience with the process—to have well-understood missions, boards that concentrated on higher-level policy issues, and boards that had clear structures for decision making. The data suggest that a coalition consisting of top management and board members needs to exist if a move toward the formalization of organizational structures and processes is to be sustained.     

Power in and around nonprofit boards: A neglected dimension of governance

In this article we propose five patterns of board governance based on the distribution of power in and around boards of nonprofit organizations. The typology proposed grew out of our findings in in-depth case studies in which the dispersion of power became the critical variable for making sense of the patterns of governance observed. These governance patterns were then incorporated into a survey of boards in the voluntary sector. We present the results of this latter phase of the research by focusing on the associations between the five patterns and the background characteristics of board members, organizational and environmental variables, and board and organizational effectiveness. The results of the study suggest that power is an important while largely neglected aspect of board governance in the not-for-profit sector.     

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 governance self‐assessment checklist: An instrument for assessing board effectiveness

This article describes the development and validation of the Governance Self‐Assessment Checklist (GSAC). The GSAC was designed to assist boards of directors of nonprofit and public sector organizations to identify strengths and weaknesses in the governance of their organizations, educate board members about the essentials of good governance, and improve their governance practices. The instrument comprises 144 items organized into twelve subscales. The results of the study indicated that the subscales have excellent internal consistency reliability, exhibit good criterion‐related validity, and are able to discriminate between stronger and weaker aspects of board functioning. The relative strengths and weaknesses in board effectiveness were identified, and the implications of the findings for the assessment of board effectiveness and field applications of the GSAC were discussed.     

The impact of funding sources and board representation on consumer control of service delivery in organizations serving low-income communities

This article examines the influence of funding sources and board members on the degree to which an organization enhances consumer control of the organization or limits access to services for some groups of clients. Based on a study of decision making in organizations serving three low-income communities, a limited degree of board influence on an organization's choice of service strategies can be traced to both the power of donors to demand service strategies that reflect their interests and the efforts of staff members to limit the ability of the board to engage in policy-making. The high degree of dependence of low-income communities on external funding restricts the development of boards as decision-making bodies that effectively reflect community interests.     

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 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.     

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.     

Strengthening Board Performance

Many nonprofit boards have undertaken board development activities, yet there has been little empirical evidence of the impact on board performance. This article reports findings from organizations: ten participated in developmental interventions, and fourteen received no interventions but served as matched comparisons. The experimental group showed significant improvements in board performance, and the comparison group did not. Lessons from the study include a number of practical steps boards can take to reorganize governance procedures and structures to enhance board effectiveness.     

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.     

Scarce as hen's teeth: Women CEOs in large nonprofit organizations

This study examines an underlying mechanism behind the gender gap in nonprofit executive leadership, focusing on the link between the representation of women on governing boards and the hiring of female CEOs. The analysis of 340 human services organizations with gross receipts greater than $10 million in GuideStar's database reveals that organizations where women make up between one third and half of the board are more likely to have a female CEO compared to organizations where women account for less than one third or a majority of the board. The findings suggest that nonprofit organizations are more likely to hire a female CEO when women constitute a “substantial minority” of the governing board.     

Nonprofit governance during organizational transition in voluntary associations

This explorative field study examines the governance challenges that voluntary associations face in the transition from an internal focus on members to the provision of services to mainly nonmembers. This transition is an important stage in the life cycle of many associations. A qualitative research design was used to study five Swiss patient organizations. This article describes the transition process in terms of five main management challenges: different target groups, self‐help group versus competence center, cooperation, fundraising, and transparency. It then examines the implications for four governance aspects that confront managers and board members: recruitment and selection of board members, tasks of the board, relationship between the board and managing director, and the role of the general assembly of members.