Governance plays a crucial role in the success and sustainability of nonprofit organizations. It involves a collective effort to ensure legal and moral health, with the board being the driving force behind the governance process. I reflect on the fundamental principles of governance and the role of the board in fulfilling an organization's mission while upholding accountability.
Governance is the process by which a group of individuals works collectively to assure the legal and moral health of an organization. It involves due diligence to ensure that the organization fulfills its obligations. The board, as the governing body, holds the responsibility for governance and is accountable for the organization's overall well-being.
Basic Principles of Governance:
The Board as a Collective:
The board operates as a collective entity and only has authority as a group. It is responsible for the governance of the organization, making decisions, and setting strategic direction. Policies and procedures are established to conduct effective board meetings, focusing on strategic issues rather than routine matters.
Focus on Ends vs. Means:
The board's primary focus is on defining the organization's ends or desired results. Management, on the other hand, is responsible for determining the means to achieve those ends. Collaboration and dialogue between the board and management are essential to establish effective goals and strategies.
Distinction between Governance and Management:
While there are similarities and overlaps, governance and management are distinct. Governance involves making high-level decisions and ensuring legal and moral compliance, while management focuses on day-to-day operations. The distinction between the two evolves as the organization grows.
Functions and Composition of the Board:
The board carries out various functions to support the organization. It is crucial to have board members with the necessary skills and experience relevant to these functions. Prior to nominating individuals for board service, it is important to clarify the distinction between the board as a whole and individual board members.
Written Job Descriptions and Performance Expectations:
An effective board has a written job description for itself, accompanied by performance expectations applicable to all board members. These expectations are enforced, ensuring clarity and accountability within the board.
Continuous Monitoring and Evaluation:
A responsible board regularly monitors its own performance in governance and ensures that individual board member performance is evaluated annually. This process helps identify areas of improvement and strengthens the board's effectiveness.
Developing a strong board requires effort, time, and attention. The executive director plays a crucial role in providing leadership and knowledge, while experienced board members well-versed in nonprofit governance can contribute significantly. By understanding and adhering to the basic principles of governance, nonprofit organizations can foster effective leadership, fulfill their missions, and create a positive impact on their constituencies.
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