So what is governance? There are many different definitions and forms of governance, from corporate to public governance. When it comes to nonprofit governance, we are usually referring to the governing of nonprofit boards.
Wikipedia’s governance definition:
Governance is the way the rules, norms, and actions are structured, sustained, regulated, and held accountable. The degree of formality depends on the internal rules of a given organization and, externally, with its business partners. As such, governance may take many forms, driven by many different motivations and with many different results. For instance, a government may operate as a democracy where citizens vote on who should govern and the public good is the goal, while a nonprofit organization may be governed by a small board of directors and pursue more specific aims.
Nonprofit governance is differentiated from other kinds of governance as follows:
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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.
What is Governance: The 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 what is governance and what the nonprofit best practices are, we encourage you to read any of these ten popular Nonprofit Quarterly articles that dive further into the complexities of governance:
Nonprofit Governance and the Power of Things
5 Points of Practice: Getting Serious about Nonprofit Governance
Nonprofit Governance’s New Frontier: Empowered and Connected Stakeholders (Webinar)
Governance and Accountability: A Different Choice for Nonprofits
Nonprofit Fraud: It’s a People Problem, So Combat It with Governance
Exploring Emerging Forms of Nonprofit Governance
BoardSource’s Board Governance Index: Is Your Board “Normal”?
Voices of Board Chairs: A National Study on the Perspectives of Nonprofit Board Chairs
The Road Less Traveled: Establishing the Link between Nonprofit Governance and Democracy
Reframing Governance II