Nonprofit Genie (FAQs) | Board Governance

Despite the obstacles and uncertainty, boards strive to perform their governance roles well. They make valiant efforts to read and understand financial statements. They listen attentively to reports about client-centered methodologies and new x-ray machines. They give up Saturdays for board retreats. When agencies are in crisis, boards go further. They give up weekends to attend emergency meetings where hard questions are asked; they sort out financial problems, and meet with disgruntled funders and clients. They seek out a wide range of informants: funders, staff, colleagues in the field, and members or other boards. When serious charges are brought to boards about CEOs, boards often hire independent investigators or analysts to report on charges of sexual harassment, racial or gender discrimination, alcohol or drug abuse, or mis-use of funds. In crisis, boards realize that while they can't manage, they must govern. And to do so they need information sources that are independent of executive staff; they need their own, diverse channels of information.

If boards can act to overcome some of their limitations and act effectively as governors in time of crisis, what are some reasons why they don't act that way in normal times?

And the rest of the time?

When Kenneth Dayton drew a line between governance and management in his famous paper, "Governance is Governance," he called for boards to stop meddling in the management of agencies. If anything, boards have taken his sound advice too literally. These days boards are reluctant to call staff to question about anything.

Some reasons why boards don't govern all the time include: lack of time, lack of independent information, and lack of familiarity with the "business." But in addition, another important factor is at work: a desire to avoid tension and conflict.

When boards act in their governance and oversight roles, uncomfortable questions may be asked; tensions may enter the room. It takes a lot of nerve for a board member to challenge a staff recommendation in a board meeting. New board members are often quiet, waiting until they know more before speaking up. But long-time board members too are reluctant to appear adversarial, not "with the team."

In fact, when asking probing, "tough" questions, board members may feel guilty. Is it fair to question staff competency in fundraising when I've only made an average contribution myself? Is it being distrustful to ask for a list of salaries and comparable salaries in similar organizations? Does my admiration for a competing organization's programs reflect a lack of loyalty to my own organization?

A subtle cause of this avoidance of conflict is the emphasis on a smooth working partnership. Boards often view tension as a symptom of an illness which everyone must work to avoid catching. Conflicts should be smoothed over. Staff frequently see board members with serious questions as obstacles at best, enemies at worst. (This is exacerbated when board members who don't do much as supporters still want to ask questions.) As a result, some boards neglect this responsibility all together and act as a rubber-stamp for the director. Just as often, boards will allow one or two members to be the chronic complainers without allowing them any real influence.

The wider nonprofit community has colluded with this avoidance through the scant attention given to the governance role in books, academic papers and other management literature. A small industry has grown up around board training and consulting. While consultants and trainers have done a great deal to help boards raise more money, they have done little to help boards be more effective as governors. One reason is that they have been hired to help the board support the organization, not to help it govern.

In crisis, the emphasis on a smooth working relationship takes a back seat to the need for action and straight answers. It is "okay" in a crisis to ask tough questions. In normal times, boards need to learn how to use the authority they are willing to assert in times of crisis.

A second reason boards don't govern is that, at least narrowly speaking, it is not in the interest of executive staff to have an active, governing board. Supporters help the manager get the job done; governors often make the job harder. The governance role is an outsider's role, holding the organization, and specifically the executive staff, to high standards of performance. While most nonprofit managers work hard to do a good job, it is not in any manager's personal interest to make her own job harder.

Finally, except very infrequently, the consequences for inadequate governance have not been borne by nonprofit leaders as individuals. The most extreme consequence for poor governance is organizational failure. However, board members are unlikely to have their careers or status in the community affected as a result of organizational failure, and the executive director can usually find another job. The big losers are the people or community purpose the organization was designed to serve. Nonprofits are often perceived as weak and struggling. Supporters are recruited to help it survive, not to rein it in. In short, there has been no one holding boards accountable: a lack of governance hasn't really mattered to board members as individuals.