This article began as something of a challenge. Could we develop a basic typology of nonprofit boards that would offer nonprofit leaders a useful framework—a framework that would help them develop boards that are functional and truly add value to the execution of their missions and visions? The question of board types is really about design, and in reality, most of us are living with a board design that is not of our own choosing. In too many organizations, one might even question whether anyone actually designed the board. But if you had the option to choose a design, what type of board would you choose?
Thoughtful board design involves the consideration of many factors and, fundamentally, offers important choices regarding power, control, engagement, accountability, and autonomy. Designs that enable an agency to achieve its goals are grounded in a solid understanding of its mission, vision, core values, the nature of its work, and the characteristics of its operating environment. Building from this understanding of the context and results we seek, we can begin to clarify which types of boards may be better aligned with the needs of our agencies.
Nonprofit boards have shared roots in the legal structures of corporate and tax law, but beyond that, a good share have been created by mimicking each other—taking their bylaws and practices from other organizations with which their founders had experience:
What should we have in our bylaws? Let me give you a copy of the bylaws from this other board on which I serve—it seems to work pretty well!
But are these similarities just window dressing that obscures a more important set of dimensions from which board design should flow?
A few authors have suggested frameworks for typing nonprofit boards, usually by explaining boards as types that may be rated along a single continuum. It is our experience that the use of a single characteristic to explain variations and commonalities across all types of boards is overly simplistic and mechanistic. Therefore, we suggest an approach that builds on a mix of the constructs from both organizational research and nonprofit board literature but, perhaps not surprisingly, ends up focusing on two primary aspects of governance that many would consider most critical to the nonprofit sector.
When we distill the organization research concepts that are most germane to the world of nonprofit boards, the result is a core typology that emphasizes two dimensions: strategic focus and stakeholder engagement. This is because, when designing a nonprofit board, there are two central questions to address:
What is the work this board needs to accomplish to meet the needs of this organization?
How do we best connect this organization to the community and its most important constituencies?
Not everyone gives these questions explicit consideration (many boards are developed in a very ad hoc, intuitive manner) yet the answers to these questions fundamentally define the type of board the organization needs. Further, once implemented, the choice of type shapes the nature of the board’s performance with regard to these two fundamental matters—whether the choice is productive or not! Developing these questions from the perspective of organization design, therefore, results in two primary dimensions of board type:
Strategic Focus: The degree to which the board’s work emphasizes leadership, strategy, and policy, versus the implementation of operations and activities. Boards have no choice regarding whether they will work on long-term and strategic decisions for the organization; this is a core responsibility. However, to the extent that there is no staff or other volunteers, the board may invest a significant share of its time in the actual implementation of the organization’s operations. The options along the Strategic Focus continuum are as follows:
Strategy and Policy: All board work is focused on the strategic, long-term direction of the organization, including external scanning, goal and strategy development, policy development, and overall evaluation and accountability.
Strategy, Policy, and Management: Most board work is focused on strategy and policy, but also includes some high-level management functions.
Management: The majority of the board’s work is comprised of managing the operations of the agency, including planning, organizing, directing, supervising, and evaluating agency operations.
Management and Operations: The board spends most of its time managing the operations of the agency, but also serves as the actual workforce for certain administrative or programmatic operations.
Operations and Activities: The majority of the board’s work is comprised of actually doing the frontline operational work of the organization, because board members also are the organization’s staff or volunteers.
Stakeholder Influence and Engagement: The central question of this continuum focuses on the nature and scope of the involvement of key stakeholders in the decision-making processes of the organization. Usually, the stakeholder group comprises some mix of clients and other beneficiaries, key funders and donors, community leaders, and others. Is stakeholder engagement (involvement and true influence) in decision processes broadly inclusive of all stakeholders, or is it relatively exclusive? The range of variations may be described as follows:
Broadly Inclusive: All key stakeholders serve as members of the governing body and are directly involved in all decisions of the agency.
Inclusive/Representative: Board members are widely representative of all key stakeholders of the agency and make regular decisions; key stakeholders are directly involved in the major decisions of the agency.
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Representative: Stakeholders are involved in the decisions of the agency through their official representatives, who serve on the board and a re accountable to stakeholders.
Less Inclusive: Most decisions are made by a relatively select group with occasional involvement of select stakeholders (directly or via representatives) in the process of making selected decisions of the organization.
Exclusive/Elite: All decisions are made by an exclusive and select elite with no significant involvement or engagement of any stakeholders in the decision processes of the organization.
Table 1 illustrates the range of options and the “location” of five general board types within this framework. These placements are only illustrative of general tendencies, however. While the table illustrates a likelihood that a given board type will be located in one part of the table or another, there certainly will be boards that claim to be of one type, yet exhibit practices not consistent with this schema. This is symptomatic of the reality that there is a rather low level of consistency linked to the various type labels. It also reflects that, while these two dimensions are primary, secondary dimensions also help explain some significant variation among boards that appear otherwise to be of similar type.
The traditional type of board occupies much of the middle, because it tends to be a midpoint compromise for each of these primary dimensions, and its many variations blur across different characteristics. This is why so-called traditional boards look different from each other, even though they are the same type. Their existence in the middle may also reflect a lack of clear choice-making and design.
It is important to recognize that there is no single type that will be best for all organizations. It is equally important to recognize that each of these types has distinct benefits and shortcomings— and weighing the tradeoffs is the essence of the design issue for every organization. For example, the more a given board becomes involved in operations (e.g., the so-called “working” or operations board), the less time it has for the strategic thinking and community engagement functions that are so central to effective governance. And if they wait for a good time to handle strategic governance matters, it won’t happen—we know from experience that urgent matters interfere with the important; the immediate tends to overpower the long term. Further, many of us are living with designs adopted to serve an earlier stage of the organization’s development; we just never got around to refining our board design and the agency developed and grew up around us!
We have found three additional dimensions that are especially useful in helping complete the picture that the Strategic Focus and Stakeholder Engagement dimensions begin to paint. These dimensions are as follows:
Board Autonomy: the degree to which the board is independent versus controlled by external entities. No board or organization is entirely autonomous, but a unique characteristic of many nonprofit boards is that they are independent and self-perpetuating (i.e., select their own members). These boards have much autonomy and are largely self-regulating. The alternative extreme is the board that has no power over who will be members. This is the case, for example, in membership associations, where organization members directly elect all members of the board.
Mission Accountability: this dimension explains the degree to which the organization’s accountability for quality or performance is driven by the professional content of its work versus the extent to which the organization’s accountability is driven by the needs and interests of its community or primary market. A hospital, for example, certainly cares about the community it serves, yet its key accountability standards come from the core content of the organization’s work. Its accountability is grounded in the health professions and assessed by profession-based accreditors. The typical membership association, on the other hand, draws its benchmarks for accountability primarily from the expectations and demands of its members; there are no external quality assurance systems or criteria that play a significant role in defining acceptable performance for the organization.
Decision Centrality: this is the question of where primary decision authority lies. Are governance and leadership decisions made together by executive and board, or dominated by either the staff or the board? In some organizations, staff drives the strategic agenda and makes key decisions; in others, the board dominates the agenda and key decisions and the role of the staff is to implement. The midpoint of this continuum is the balance advocated in much of the prescriptive literature on boards, promoting the value of achieving a balanced partnership between the board and the chief staff position. A unique version of this is the founder-dominated board, where the founder (regardless of role) dominates all significant decisions of the agency.
There are other characteristics that influence the nature of the board, but we find they do not fundamentally differentiate one type from another. Often these are the outgrowth of a choice about board type. For example, board size (i.e., number of members) makes a difference in board dynamics, but the choice about size usually flows from the choice of a specific model (e.g., a “corporate board” will tend to be quite small and a “fundraising board” often will be quite large).
Thinking about Your Board Type
Board type is not independently important to an organization; its significance is in the context of what the organization needs from its board. Different types have different values, and the framework we outline is designed to help board leaders understand the degree and way in which their board’s type is or is not aligned with the needs and values of their agency. We have included with this article a brief assessment tool for categorizing board type. As it is organized, an assessment should focus first on the two primary dimensions of board type (strategic focus and stakeholder engagement), and then be elaborated by assessment of the ways the secondary dimensions complement or interfere with the type.
Table 2 applies this framework to compare the characteristics of several of the commonly discussed board types, and illustrates the similarities and differences among them. Of course, not all real boards with a particular label will appear similar to these ratings, given that these were developed by considering common characteristics of generic prototypes.
This tool can be useful for an individual leader to use as they reflect on the implications of their board type for the work of their organization, but it will be more useful as a basis for dialogue among a group of agency leaders as they consider how their board works and the degree to which that type is suited to the organization and the community it serves. In other words, it offers a basis for boardroom discussion about how fully and in what ways the board’s design provides the strategic leadership and stakeholder engagement that are central to effective nonprofit governance and leadership.
The framework proposed in this article is preliminary in nature, developed from our extensive research and consulting experience and informed by the literature of organization studies research. The next step in its development is to conduct empirical research to validate the framework and test its utility for board design and development. We welcome reflection and feedback from board and agency leaders, consultants, and researchers regarding the validity of the framework and its utility in explaining variation in board type.
Table 2: Prototypical characteristics of common board types
David O. Renz, Ph.D., is the director of the Midwest Center for Nonprofit Leadership in the Henry W. Bloch School of Business & Public Administration at the University of Missouri- Kansas City, and currently serves as president of the Nonprofit Academic Centers Council.