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Nine Tips to Improve Nonprofit Governance
A new Stanford Graduate School of Business survey of 924 nonprofit directors supports the long-held hypothesis that many nonprofit boards are ineffective. The research revealed a sizable minority are 1) unsure of their organization’s mission and strategy (27 percent of respondents); 2) dissatisfied with their ability to evaluate their organization’s performance (32 percent); and, 3) uncertain whether their fellow board members have the experience to do their jobs well (65 percent). Accounting Professor David F. Larcker, the lead researcher, said, “Our research finds that too often board members lack the skill set, depth of knowledge and engagement required to help their organizations succeed.” For the survey, Larcker and his colleagues asked participants about their board’s composition, structure and governance practices.

The researchers offered nine recommendations to improve nonprofit board governance. First, ensure the mission is properly focused. Second, ensure the organization’s mission is understood by the board, management and all key stakeholders. Third, set explicit strategies and goals tied to achieving that mission. Fourth, develop rigorous performance metrics that reflect those goals. Fifth, be sure to hold the executive director accountable for meeting the performance metrics. Sixth, assemble a board comprised of individuals with skills, resources, diversity and dedication to address the needs of the organization. Seventh, explicitly define the roles and responsibility of board members. Eighth, establish well-defined board, committee and ad hoc processes that reflect the organization’s needs. Finally, conduct regular reviews that assess the performance of each board member and the board overall.
Business Wire (04/22/2015)
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JULY/AUGUST 2015 EDITION
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