Current nonprofit sector research and recommendations for effective day-to-day practice from ASU faculty, staff, students, and the nonprofit and philanthropic community.
Fall 2016 Graduate Alumna,
Governing boards are the backbone of many nonprofit organizations. When a board is effectively fulfilling its responsibilities, an organization will be more efficient and more successful. According to a study of 202 organizations in the Los Angeles and Phoenix areas, organizations that reported higher board effectiveness also reported higher perceived organizational success (Brown, 2005).
Despite the importance of governing boards in the success of an organization, nonprofits consistently struggle to create an effective and engaged board. While most nonprofit directors report being satisfied with their board, in a survey done by researchers Larcker, Donatiello, Meehan & Tayan, (2015), nearly all nonprofit participants also reported some sort of serious governance-related problem within the previous calendar year that has negatively affected their organization. Shockingly, two-thirds of organizations surveyed are not confident in the board’s experience level and half are unhappy with the board’s engagement level.
Researchers Chait, Holland and Taylor (1991) identified six characteristics of strong board leadership:
- Contextual Dimension- The board understands the organization’s mission, goals and values. They make decisions based on their understanding of the organization.
- Educational Dimension- The board takes care in ensuring all stakeholders understand the boards role and process. They often seek feedback and communication from other stakeholders on their performance.
- Interpersonal Dimension- The board functions as a group in all aspects and understands how to handle conflict.
- Analytical Dimension- The board welcomes all perspectives when solving a problem.
- Political Dimension- The board maintains a positive relationship with all stakeholders.
- Strategic Dimension- The board is concerned with planning the future of the organization.
Increasing the Contextual Dimension
Increase board diversity. Similar individuals are more likely to agree with each other and not challenge one another’s beliefs and opinions. Nonprofit boards that are more racially diverse are rated higher on the contextual dimension (Brown, 2002). Rating higher on the contextual dimensions creates a more effective board. Often times, a more diverse board is more representative of the population that the organization serves. Because of this, a diverse board is better able to represent the ideas and opinions of a wide variety of the organization’s constituency and therefore better to serve the organization.
Increasing the Educational Dimension
Ensure board members understand their roles and responsibilities. The Educational Dimension focuses on the board’s communication with stakeholders. In order to be a truly effective board, board members must be able to explain their current roles and responsibilities to stakeholders who are on the outside looking in. In order to accomplish this, board members need to be able to communicate successfully with stakeholders and they need to fully understand their roles and responsibilities.
Increasing the Interpersonal Dimension
Teach conflict resolution strategies. One key component of the Interpersonal Dimension is that board leadership and board members understand the importance of conflict resolution and understand the best methods to use when a conflict arises. Because boards should be encouraging all members to voice their opinions, disagreement is inevitable. In many cases, disagreement is good and encouraging. However, if the members do not know how to constructively discuss the issues, then the conflict will not produce any beneficial results.
Increasing the Analytical Dimension
Encourage conversation. The Analytical Dimension focuses on the board being welcoming to all opinions. All board members should have the opportunity to discuss their thoughts and opinions at meetings. If the Board Chair and a few other board members are the only individuals permitted to speak then it eliminates the group environment and stifles the rest of the board.
Increasing the Political Dimension
Understand the organization. In order for organizations to have a high Political Dimension rating, all board members need to be aware of what stakeholders they serve. Stakeholders will be different for all organization. However, they generally include staff members, program participants and donors. To ensure that board members understand the responsibility of maintaining positive relationships with various stakeholders, the board must understand who the stakeholders are.
Increasing the Strategic Dimension
Undertake SWOT Analysis and Strategic Planning Sessions. Strategic development is one of the key responsibilities of a nonprofit board. As such, the Strategic Dimension is incredibly important in measuring a board’s effectiveness. Boards are tasked to, in partnership with various staff members, lead the strategic goals of the organization. Many boards struggle to begin their strategic planning sessions. Completing a SWOT analysis is a good way to begin the planning process. A SWOT analysis assesses the organization’s strengths, weaknesses, opportunities and threats. This type of analysis can be particularly helpful in beginning a strategic planning session because it gives a complete picture of the organization and allows board members to fully understand where the organization currently is and where it could go in the future. A strategic plan should consist of achievable goals for the organization’s future direction. Additionally, it is important to have a schedule to revisit the strategic plan and confirm that the organization is still on track to complete it. Adding the strategic plan to every board meeting agenda can help keep the plan front of mind and relevant.
Board performance is exceedingly important. When a nonprofit governing board successfully fulfills its duties, the organization is far more likely to succeed. By focusing on these six dimensions of a successful board, nonprofit boards can begin to strengthen their board effectiveness and therefore their organizational effectiveness.
Brown, W. A. (2005). Exploring the association between board and organizational performance in nonprofit organizations. Nonprofit Management and Leadership, 15(3), 317-339.
Brown, W. A. (2002). Racial diversity and performance of nonprofit boards of directors. Journal of Applied Management and Entrepreneurship, 7(4), 43-57.
Chait, R. P., Holland, T. P., & Taylor, B. E. (1991). The effective board of trustees. R&L Education.
Larcker, D. M., Donatiello, N., Meehan, W., III, & Tayan, B. (2015, July). 2015 Survey on Board of Directors of Nonprofit Organizations (Rep.).
Alexa graduated with a Master of Nonprofit Leadership and Management from ASU in December 2016.