There are many different definitions and forms of governance, from corporate to public governance. When we talk about nonprofit governance, we are usually referring to the governing of nonprofit boards.
Wikipedia’s governance definition:
Governance is the overall complex system or framework of processes, functions, structures, rules, laws and norms born out of the relationships, interactions, power dynamics and communication within an organized group of individuals. It sets the boundaries of acceptable conduct and practices of different actors of the group and controls their decision-making processes through the creation and enforcement of rules and guidelines. Furthermore, it also manages, allocates and mobilizes relevant resources and capacities of different members and sets the overall direction of the group in order to effectively address its specific collective needs, problems and challenges.
Nonprofit governance is differentiated from other kinds of governance in a number of important ways:
Nonprofit governance has a dual focus: achieving the organization’s social mission and the ensuring the organization is viable. Both responsibilities relate to fiduciary responsibility that a board of trustees (sometimes called directors, or Board, or Management Committee—the terms are interchangeable) has with respect to the exercise of authority over the explicit actions the organization takes. Public trust and accountability is an essential aspect of organizational viability, so it achieves the social mission in a way that is respected by those whom the organization serves and the society in which it is located.
Best Practices for Boards
Good nonprofit governance is all about focusing on the processes for making and implementing decisions that will continue to advance an organization’s principles and mission, providing strategic leadership to a nonprofit organization.
To get a more comprehensive understanding of governance and nonprofit best practices, we encourage you to read any of these popular NPQ articles that dive further into the complexities of governance:
- Reimagining Nonprofit Boards: A Three-Part Series
- Network Governance as an Empowerment Tool
- Nonprofit Boards Remain Overwhelmingly White—Here’s How to Change That
- Stop Passing the Mic: Exploring Contradictions in Power Sharing
- Why My Nonprofit Has No Executive Director
- Are Your Organization and Its Board “Access Able”?
- Culture as Problem-Solving: Lessons from Global Governance
- Want Effective Stakeholder Governance? Say Hello to Social Cooperatives
- Nonprofit Fraud: It’s a People Problem, So Combat It with Governance
- Voices of Board Chairs: A National Study on the Perspectives of Nonprofit Board Chairs
- Reframing Governance II
