Thursday, February 18, 2010

How is Your Organization’s Governance Equilibrium?

This is the second in a three-part series on Organizational Equilibrium, written by Non-Profit Consultant, Derek Link. Part 1 (How is Your Organization's Fiscal Equilibrium?) was posted on February 16, 2010.

Governance as defined on is, “a method or system of government or management.” Non-profit organizations are governed by a Board of Directors who by design set policy, monitor accountability, assist with fund raising, and give direction to the Executive Director. Good governance is a team effort but bad things can happen when the governance of an organization is out of balance; that is, if there are imbalances in power, control, or understanding.

I worked in an organization once which had a publicly elected Board. This creates an interesting conundrum for the executive of the organization because they must be astute politically in order to survive changes in the Board. One particular Board member who was elected was an extremely difficult person to work with. She was smart and gifted verbally so she was able to deter all of the other Board members from standing up to her. She was also mean and enjoyed being in a position of power. She would go on the attack in Board meetings and even on an individual basis with executives of the organization. She eventually lost her seat but not before she had wreaked havoc on the leadership of the organization to the extent that several senior executives left the organization rather than suffer her unpredictable decision-making and verbal abuse.

My point in this is to say that non-profit Boards get to select their members according to the dictates of their bylaws. This puts non-profit organizations in a unique position to select Board members that can bring necessary skills, talents, and connections to the organization. This feature of non-profit organizations is a strength and can lead to excellent governance that is balanced, agile, and intelligent.

The opposite can also be true. If a Board becomes a closed society unto itself and refuses to include members outside a circle of friends, colleagues, or even a circle of thought, governance can stagnate and the same mistakes may be made over and again. Opportunities for change, growth, or reform may be lost.

Another issue with governance can be a Board that depends too much on its Executive Director and cedes responsibility for its role – a Board that becomes the proverbial “rubber stamp”.

I’ve seen “rubber stamps” in publicly elected Boards and with non-profit Boards. Non-profit organizations are frequently established by one or two people who plan to run the operation and then recruit a Board mostly because they must have one, not because they seek to build strong governance. So the founders may seek people who aren’t going to rock the boat.

Governance that relies on a strong leader can function well over time if the Executive Director is a skilled, moral and values-driven individual and, if they don’t leave. Of course as time passes everyone will move on for one reason or another so if governance of an organization has depended on one person, it can leave the organization in disarray.

I’ve found over the years in organizations reliant on one person for governance that there tends to be a pervasive fear in the organization about the person’s health, age, ability to take better offers, and so on.

Keeping the long view in mind is important so try not to depend too much on one individual for governance leadership. Stable governance of an organization is produced by equilibrium of a strong Board and strong leadership.Non-profit organizations are in the enviable position to recruit Board members that create this equilibrium.


Part 3 in this series (How is Your Organization's Operational Equilibrium?) will be posted on February 20, 2010.

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Creative Resources and Research is a consulting firm specializing in grant writing, grant seeking, program evaluation and professional development training. We have worked with hundreds of clients including public and private schools, school districts, universities, non-profit organizations, and social service agencies throughout California, securing over $155 million from federal, state and private foundation funding sources over the past decade. Our primary grant writers and program evaluators have over 50 years of combined experience in the education and social services fields. At CRR we prefer a personal approach to the clients we work with; by developing long term relationships, we are better suited to match client’s needs with available funding sources. We provide a variety of services to help assist you, including grant writing, evaluation consulting, professional development opportunities, and workshops.