Vol. 14 No. 2: September 2014
RESEARCH INSIGHTS FROM THE NONPROFIT FIELD
There has been substantial growth in research literature on nonprofit governance and boards. Important insights have emerged about how nonprofit boards work, the practices they employ and the impact they have on the performance of a nonprofit.
A huge contribution to the study of nonprofit governance is the book Nonprofit Governance: Innovative Perspectives and Approaches (Routledge, July 2013) edited by Dr William Brown with Chris Cornforth. In Chapter 2, “Nonprofit Governance-A Review of the Field”, authors David O. Renz and Frederik O. Andersson have provided a useful summary and review of the fast developing research field over the last ten years.
The insights include:
Fundamentally, board roles reflect the tensions that emerge as boards attempt to address or reconcile the conflicting demands of three core functions:
1. Controlling and monitoring.
2. Coaching and enabling.
3. Fundraising and resource development.
Board work is contingent on environmental conditions.
Funding source has a bearing on the roles that boards assume, especially government funding. For example, boards of nonprofits that receive greater government funding are more likely to engage in financial monitoring and advocacy roles while those with less tend to be more active in fundraising roles.
Those organisations with substantial government funding are much less likely to have strong community representation on their boards.
Board size is not correlated with board engagement or performance nor is there evidence that compensating board members helps attract stronger members.
Organisations who rely on donors, as opposed to commercial or government sources, utilise significantly more board involvement practices.
While there is extensive discussion of “Best Practices” there is limited support for the existence of universal “Best Practices” for boards.
Several studies have identified strategies that lead to great board capacity and performance.
A well-grounded systematic board development initiative can have an impact on board effectiveness.
There is a relationship between board member commitment and board performance. This positive outcome relates to the length of membership, frequency of board attendance and the time spent on organisational activities.
Board member effectiveness is positively associated with three specific types of recommended practices:
1. Planned board recruitment.
2. Board member orientation.
3. Performance evaluation of individual members and the board as a whole.
The use of board self-assessment tools is growing.
CEO membership on the board is related to lower levels of member engagement.
There is no relationship between board size and board engagement and performance.
There is a high correlation between chief executive demographics and board member’s race, ethnicity and gender distribution. Women and minorities are somewhat better represented among boards of smaller, less prestigious nonprofits.
Mission, organisational size and board prestige are reported to relate to both racial/ethnic and gender composition.
Board size and composition is linked to organisational attributes such as funding, financial structure and organisational life stage.
Board composition is likely to reflect the structure of donative revenues, and boards that emphasise greater stakeholder engagement are larger.
Board composition is related to the degree to which nonprofits are able to secure resources from their environment, as board diversity may function as a legitimising force that “signals” an agency’s ability to operate effectively.
Board composition influences what a board attends to. For example, clients on boards tend to increase attention to service delivery while financial experts on a board tend to increase the funder orientation of the board.
Large institutional and public donors have been found to encourage boards to organise and operate in ways that enhance transparency and good governance.
Gender representation has some impact on board performance with one study finding that female trustees tend to devote more time to board issues than men. It also reports that gender is not related to levels of personal giving or board members’ engagement in monitoring behaviours.
Board diversity and heterogeneity is positively associated with certain types of organisational performance. For example, boards with a higher percentage of racial minorities positively impacted board effectiveness, and greater representation of stakeholders groups was positively related to organisational performance.
Much has been written about the human side of governance – there is a realisation that how board members engage in their work has implications for both board and organisational performance and impact.
Groundbreaking research by William Brown is also included in the book. In Chapter 5, “Antecedents to Board Member Engagement in Deliberation and Decisionmaking.” Brown identifies four factors that help to facilitate a board member’s active engagement in the core functions of governance, namely discussion and deliberation. The four factors are:
1. Perceived ability.