It’s Time for Boards to Rethink How They Govern

Non-profit boards are not known for their capacity to change the way they operate. With the organizations they govern isolated from both electoral politics and market forces — and with the boards themselves held to varying standards of accountability — trustees can become ossified in their thinking. Add to that an instinctive human aversion to change, and the result is that non-profit boards tend to steer a steady course, content with the status quo, until the iceberg is in plain view.

Yet in an age in which the pace of change is both bewildering and unprecedented, boards that fail to change may be risking not only their organizations’ relevance, but their very survival. With the rapid rise of new information technologies, and with the increasing push in American society toward more-participatory governance, boards can no longer structure their activities based on past success, or simply on what’s comfortable and familiar to board and staff members. Indeed, boards harnessed to traditions that inhibit the free flow of information and discourage timely action may be dooming their organizations to insignificance or oblivion.

Each week, dozens of executives and board members contact the National Center for Nonprofit Boards with questions about a board’s role, structure, and responsibilities. Anecdotally, there seems to be widespread and growing interest in change and innovation in governance.

And many non-profit boards have already begun the process of reconsidering the way they work: changing meeting schedules to accommodate strategic planning and other key activities, using new technologies for board members to keep in closer touch with one another and with their organizations, rethinking committee structures and officer job descriptions, and asking fundamental questions about the role and composition of the board.

Some examples:

* The American Association of University Women is reviewing its governance structures and operating procedures to determine how to better accommodate board members who are struggling to balance the demands of family, work, and multiple volunteer commitments. Changes under consideration include reducing the number of face-to-face meetings in favor of on-line and electronic communication; increasing the number of board members who are appointed, rather than elected; and re-examining job descriptions for board officers in order to distribute responsibilities more equitably.

* The Hebrew Immigrant Aid Society, an international refugee-resettlement organization based in New York, realized that its 250-member board had become not only unwieldy, but anachronistic as well. Its governance structure had been designed to insure fund-raising success, but had not evolved along with changes in Jewish philanthropy and community life. The society responded by reducing the board to 50 members and adopting clear expectations for participation.

* Minnesota Public Radio, the nation’s largest regional public-radio network, developed a complex organizational and governance structure to insure that the interests of its successful commercial enterprises didn’t overshadow its mission of producing and broadcasting public-radio programs. While the commercial success of MPR’s for-profit catalogue business and bonuses paid to top executives raised questions among non-profit groups, the sale of the catalogue company to the retailer Dayton Hudson left MPR in an enviable position, with an endowment of more than $100-million.

* The Colorado Symphony, the new orchestra formed after the bankruptcy of the Denver Symphony, created a new governance system in an effort to insure a cooperative, rather than adversarial, relationship between musicians and management. Musicians fill one-third of the seats on the board and on all committees — a radical departure from traditional orchestra governance, in which musicians have few, if any, seats at the board table.

In light of those and other changes in the governance of non-profit organizations — and recognizing that we may have been encouraging uniform and traditional forms of governance at a time when organizations would be better served by creativity and innovation — the National Center for Nonprofit Boards has begun to study alternatives to business-as-usual boards. For the past year, we have been planning a joint project with the Hauser Center for Nonprofit Institutions at Harvard University’s John F. Kennedy School of Government to explore whether non-profit groups could benefit from new forms of governance.

William Ryan, the project researcher, has already interviewed academics, consultants, and other leaders in the non-profit world to assess their opinions. Although a handful of those interviewed staunchly defended the “traditional” form of non-profit governance, the majority cited serious flaws in the current system. Among other things, they pointed out that boards tend to govern only in crisis situations, that many boards lack adequate information (or have too much information) on which to base decisions, and that staff members or small “‘in’ groups” of board members control decision making. Many respondents expressed their desire for new approaches to governance.

What those approaches may be remains unclear, and the questions far outnumber the answers. For example, will technology be a driving force for fundamental change in governance, or will it simply encourage incremental innovation? How can governance structures encourage organizations to respond to change? Is greater uniformity in governance the key to promoting greater accountability, or is uniformity part of the problem?

Despite the uncertainty, clues can be found about what board members desire. The widespread popularity of the author and consultant John Carver’s governance model, for example, points to the appetite for increased clarity and differentiation between the roles of board and staff members. The Carver model emphasizes the board as a policy-making body and suggests that staff members be given wide latitude to manage within clear boundaries determined by the board.

The representative model, in which an organization’s clients or beneficiaries govern, is also an alternative. And some researchers are exploring systems that are characterized by minimal structure and continuous evolution.

Still another model stems from the collectivist thinking of the 1970s. In her recent book The Structure of Women’s Nonprofit Organizations, Rebecca Bordt, a professor of sociology at the University of Notre Dame, discusses traditional bureaucratic organizations, collectives, and what she calls “pragmatic collectives”: hybrid organizations that exhibit some characteristics of each organizational form.

According to Ms. Bordt, as women’s organizations that were founded in the 1970s with a collectivist ideal moved, in the 1980s and 1990s, into more mature stages of development, the most successful tended to evolve into organizations that combined elements of egalitarianism — such as shared decision making — with more traditional, hierarchical structures. Such organizations — those that build on history and tradition without being bound by them — also may represent the future of the non-profit world.

Should the Carver model, the representative model, the collectivist model, or even other models yet to be developed be actively promoted as desirable alternatives? It is still too soon to say. One thing is certain, however. At a time when change is in the very air we breathe, non-profit organizations and their boards must develop the ability to adapt to new realities.

Judith O’Connor is president of the National Center for Nonprofit Boards, in Washington.