Editors’ note: This article was first published in summer 2003 and is featured in NPQ’s special winter 2012 edition, “Emerging Forms of Nonprofit Governance.”
The past twenty years have seen the steady growth of training programs, consulting practices, academic research, and guidebooks aimed at improving the performance of nonprofit boards. This development reflects both hopes and doubts about the nonprofit board. On the one hand, boards are touted as a decisive force for ensuring the accountability of nonprofit organizations. On the other hand, the board is widely regarded as a problematic institution. And it’s not just the occasional nonprofit financial implosion or scandal that’s troubling. All institutions, after all, have their failures. Perhaps more worrisome is the widespread sense that underperforming boards are the norm, not the exception.
After contributing to these board-improvement efforts for over two decades, as both researchers and consultants, we have recently looked afresh at the challenge of improving nonprofit boards as part of the Governance Futures project. Conceived by BoardSource (formerly the National Center for Nonprofit Boards), in collaboration with the Hauser Center for Nonprofit Organizations at Harvard University, the project seeks to re-conceptualize governance. Although it ultimately intends to generate new and practical design strategies, we have focused first on the problems of the board—on the theory that a better framing of the problem will lead to better responses. Through dialogue with practitioners, a review of the literature on nonprofit governance, and the application of various intellectual frameworks (from organizational behavior to sociology), we have begun to see the cottage industry of board improvement in a new light. Most importantly, we have concluded that we have been working on the wrong problem.
Problems of Performance
The problem with boards has largely been understood as a problem of performance. Judging from our recent discussions and interviews with board members, executives, and consultants, three board-performance problems appear most prevalent. First, dysfunctional group dynamics—rivalries, domination of the many by the few, bad communication, and bad chemistry—impede collective deliberation and decision making. Second, too many board members are disengaged. They don’t know what’s going on in the organization, nor do they demonstrate much desire to find out. Third, and most important, board members are often uncertain of their roles and responsibilities. They can’t perform well because they don’t know what their job is. When we spoke with twenty-eight nonprofit governance consultants about their recent engagements with troubled boards, nineteen characterized the client’s problem as ignorance or confusion about roles and responsibilities.
Scores of analysts have addressed this problem and, in response, offered one version or another of an official job description for the board. The vast, prescriptive literature can fairly be distilled into five functions:
- Set the organization’s mission and overall strategy, and modify both as needed.
- Monitor management, and hold it accountable for performance.
- Select, evaluate, support, and, if necessary, replace the executive director or CEO.
- Develop and conserve the organization’s resources—both funds and property.
- Serve as a bridge and buffer between the organization and its environment, advocating for the organization and building support in its wider community.
The roles-and-responsibilities conception of board performance has obvious appeal. With a problem defined as ignorance, the solution becomes knowledge. And since we already possess—in the form of official job descriptions—the knowledge that boards need, we need only disseminate that knowledge to unenlightened trustees to cure the problem. The expectation is that we can train our way out of board problems.
Behind these problems of performance, however, looms another, more fundamental problem: one of purpose.
Some advocates of a roles-and-responsibilities approach inadvertently acknowledge this problem when they reason that, since the board endures as an institution, it must be important. “The widespread existence of boards,” writes Cyril Houle, “means that they must possess values which are apparently essential to modern life. It will therefore be useful to assess the reasons why boards are important.”1 The very formulation of this approach—or variations common in the literature—betrays a fundamental problem. If the board is so important, why do we need a whole literature to explain why this is so? This question raises another: What if the central problem plaguing boards is not ignorance about important roles and responsibilities but lack of a compelling purpose in the first place?
Problems of Purpose
We can approach the problem of purpose in two ways. We can attempt to expose the board as an irrelevant institution constructed around a set of hollow roles and responsibilities. Or, as we prefer, we can ask whether the purposes now ascribed to boards might be necessary, but insufficient, to sustain engaged and effective service by nonprofit board members. Even this approach, however, requires some reflection on the problem of purpose. We start with three causes of the problem.
The Substitute’s Dilemma: The Most Essential Work Can Be the Least Meaningful. By law, the board’s fundamental purpose is to hold a nonprofit accountable to the broader community. The law offers little guidance, however, on how boards should do so—beyond referring to broadly conceived “duties of loyalty and care.” The standard statements of roles and responsibilities offered to board members attempt to add flesh to this legal skeleton. But a job predicated on legal accountability is, almost by definition, not a compelling job. To ensure this accountability, boards focus on norms and standards of minimally acceptable behavior. Trustees are tasked to prevent trouble more than promote success.
This approach places board members in a position akin to that of the maligned substitute teacher. As an institution,the substitute teacher works effectively. The device assures school administrators and parents that children who might otherwise run amok will remain under control. But the job of the substitute teacher is singularly unattractive. Adherence to minimum standards—not trying to teach but merely trying to keep order—is as or more challenging than actually teaching. It is also far less rewarding. So it is with board members. What we have essentially asked is that trustees keep order.
Why not concede that boards do unglamorous but essential work and get on with it? The reason lies again in the paradox of substitute teaching. The teacher who educates children actually stands a better chance of keeping order than the teacher required only to keep order. Similarly, the board that is expected to improve organizational performance also stands a better chance of ensuring accountability. By focusing primarily on accountability, we have created a job without a compelling purpose. As a result, board members become disengaged. And the more disengaged they are, the less likely trustees are to ensure accountability—the very reason we created boards in the first place. By asking for a little, we get even less.
The Monarch’s Challenge: Important Work Is Sometimes Institutional, Not Individual. The problem is not that the board is some pointless appendage that renders board members inconsequential. To the contrary, the board, as an institution, is so important and effective that it can sometimes function almost without regard to the effort of individual board members. In that sense, a board may be more like a heart—too vital to rely on conscious effort to perform. Consider four cases where the board can perform well and thus leave board members little to do.
First, boards provide legitimacy for their organizations. Unlike the business sector, where stakeholders can judge a corporation by fi