MBAX 6850 Week 4 Board Structure Discussion Post Example

Week 4 Discussion: Comparing Nonprofit Governance Structures

A Board That Picks Its Own Successors Answers to No One Outside the Room: Comparing Lakeshore's Self-Perpetuating Board With a Member-Elected Arts Association Board

The single difference that matters most between two nonprofit boards of the same size is who chooses their members. Lakeshore Literacy Alliance, the composite adult literacy nonprofit I have followed this term, has a self-perpetuating board: its 15 directors elect their own successors, usually from the networks of current members. Marisol's arts association, which she described last week, has a membership board: its 400 dues-paying members elect directors at an annual meeting.

The consequence is that Lakeshore's board answers formally to no one outside the room. Members of the arts association can vote directors out if they dislike the board's direction; Lakeshore's learners, tutors and donors cannot. The state attorney general has oversight of charities, and funders can withdraw support, but neither can remove a director. Carver (2006) argues that every board should identify the "moral owners" it serves on behalf of; a self-perpetuating board must do this deliberately, because no election forces the question.

I am not arguing that Lakeshore should become a membership organization. Membership boards have their own problems: elections can be dominated by a small, active faction, and members may vote for their own interests, such as lower dues, rather than the mission. But Lakeshore could adopt partial substitutes for the accountability elections provide. Term limits of two three-year terms would ensure turnover. A nominating committee that deliberately recruits beyond existing networks, including former learners and tutors, would widen the perspectives represented. And an annual board self-assessment, shared with major funders, would expose the board's performance to people outside it. Ostrower (2007) found that many boards do not assess their own performance, which makes the last step unusual but valuable. None of these steps would give learners a vote, but together they would make the board explain itself to someone other than itself.

What substitutes for elections have you seen work on boards you know, and did they last beyond the director who introduced them?

Reply to Marisol

Marisol, your point that only about 60 of your association's 400 members vote in board elections is important. A membership board with low turnout may be no more accountable in practice than a self-perpetuating one, since a small group effectively chooses the directors. Does your association do anything to raise turnout, such as online voting or candidate forums, and has turnout changed when it has?

Reply to Terrence

Terrence, you described your hospital foundation's board as partly appointed by the hospital system. That is a third model, where accountability runs to a parent organization rather than to members or to the board itself. It solves the accountability gap in one direction but may create another, since the foundation's donors might want independence from the hospital. Kearns (1994) describes how nonprofits face several overlapping lines of accountability at once, and a parent-appointed board makes one of those lines dominant. How does your foundation handle a disagreement between donors and the hospital?

References

Carver, J. (2006). Boards that make a difference: A new design for leadership in nonprofit and public organizations (3rd ed.). Jossey-Bass.

Kearns, K. P. (1994). The strategic management of accountability in nonprofit organizations: An analytical framework. Public Administration Review, 54(2), 185-192. https://doi.org/10.2307/976528

Ostrower, F. (2007). Nonprofit governance in the United States: Findings on performance and accountability from the first national representative study. Urban Institute.