Book review: Nonprofit Governance

Nonprofit gov

by David Williams

Nonprofit Governance, published last June, discusses governance in ‘nonprofit’ or ‘not-for-profit’ organisations. While sector boundaries are imprecise and can change, the focus is on ‘third sector’ organisations. There are no specific examples of higher education institutions in the book, but it does explore issues of governance that vice-chancellors and their governing bodies will find of interest.

The contributors to the book are largely academic staff working in Australia, North America and the United Kingdom. The book takes a research perspective, but includes case studies illustrating aspects of governance in a specific sector or organisational setting. Nonprofit Governance is a collection of 14 chapter length contributions, organised under five themes. Each theme explores a current area of research on governance.

The reader is reminded that governance is a function and a board is a structure. Further, there is a need to look beyond composition and structure and give attention to board behaviours. Questions about the groups most likely to be represented on Boards, and democratic participation through and beyond Boards are explored.

The behaviour of the board chairs, individual board members and the board as a collective form two of the book’s themes The chapter entitled ‘Board monitoring and judgement as processes of sense making’ considers issues of monitoring non-financial performance and explores ‘sense making’ by Board members. The idea of ‘failures’ of board monitoring being ‘good people struggling to make sense of their circumstances’, rather than ‘bad people making poor decisions’ is introduced.

A review of organisational crises experienced by two museums and two performing arts organisations forms one of the case studies in the book. The problems created by unchallenged trust by the Board of the chief executive and a failure to receive, or demand, adequate and regular information about financial performance are set out. Subsequent financial difficulties resulted in a pivot in the Board’s focus towards financial matters, and away from ‘mission orientated’ activities.

The balance of ‘trust’ and ‘control’ between the Board and the chief executive was changed by the crisis. A period of intensive Board control (i.e. the opposite polarization to the previous situation), during which the organisation’s problems were addressed, was followed by the emergence of a ‘negotiated balance’ to the relationship between the Board and the (and in some cases, a new) chief executive. For some organisations, a further element to post-crisis governance was the remaking of the Board to change the balance of members with business skills and those with professional, sector-specific, expertise.

Not all contributors to the book support a move towards more conventional board structures and membership, and the Community Engagement Model™, is put forward as an alternative approach for at least some nonprofit organisations.

The case of English housing associations illustrates the impact of context on governance. Many associations have assumed responsibilities for what was formerly a public service. As a consequence they have moved from operating as ‘a small-scale complementary service provider to the main provider of social housing over the past 30 years.’ As a result the changes to the scale and complexity of running these organisations has affected governance substantially. Board membership has moved from the inclusion of representative members (e.g. tenants and local authorities), working on a voluntary and unpaid basis, to boards of ‘professional’ independent non-executives now paid for their work. A change from representational to professional boards.

The book goes on to consider ‘multi-level governance’. Contributors distinguish, and discuss, ‘nested’ (intra-) and ‘network’ (inter-organisational) governance in the context of federations and collaborative structures.

Although this book contains many interesting observations and insights, and claims to be written in ‘an accessible manner’, it unlikely to be read by those who might benefit most from some of its contents. As one contributor acknowledges when discussing their own contribution to the book, research on nonprofit governance is frequently published in scholarly journals (or discussed at academic conferences?) and risks never reaching practitioner communities. This is a pity, and a timely reminder to academic researchers of what should be an important purpose of their work.

Nonprofit Governance: innovative perspectives and approaches, edited by Chris Cornforth and Wiillam A Brown.

David Williams is the Leadership Foundation’s governance web editor.

The beating heart: student governors

beating-heart sept13

By Dr Mark Pegg

I have been asked to speak to student governors about why the Leadership Foundation needs to listen to the agenda set by emerging student leaders and how we need to develop leadership skills for careers beyond the university boardroom.
I was delighted to be asked. I am a believer. Student governors make a real difference. At several levels – big picture thinking, where students influence university strategic decision-making, at the practical day to day learning about leading complex organisations and through significant early exposure to personal leadership development – all with long term benefits.

I was a president of a student union and student governor myself many years ago. It was a small college, but the principles hold good, and I still use learning from the experience pretty much every day. When I was at university we had a voice, but no real power. If lecturers were indifferent (sadly many were) the response was: ‘tough, like it our lump it’. If we did not like the rise in fees in a time of great inflation we went on rent strike, did a demo and occupied the university offices. We developed as political animals, but actually had zero influence in corridors of power or any decisive impact on decision-making.

Today, at the strategic level, the balance of power has clearly shifted in favour of students. With the NSS, student loans, overseas students, increased competition for students, league tables, it is obvious universities need to contract with students. To hear and heed the student voice. They need a responsible, empowered student representative body, one they listen to, respond to and incorporate the thinking in to decisions. Learning for student governors here is invariably around complexity faced by leaders, where decisions are ambiguous and difficult. To progress issues where student governors have a lot to offer – such as efficiency, sustainability, employability and diversity – is often hard. To turn discussion into decisions and then into action and achievement is never clear cut.

Learning from the best leaders, those who take this on, bring people with them and make it happen is gold dust. It is also a two way process. Students are more than  consumers; they are part of the body politic of a functioning university, part of the beating heart. It’s a commonplace observation that students should provide some reverse mentoring and inform senior decision making on the digital future – resources, investment and working practices on social networks, mobile learning and the learning space students need.

At the practical level, you learn so much about administrative complexity, how culture eats strategy for breakfast, the illusion that pulling a lever in the boardroom is necessarily connected to anything moving or more importantly, moving in the direction you want it to go.

I was fortunate to attend meetings held by a very good chair. At meetings I chair, I use this approach as my baseline and endeavour to live up to the standards he set. I learned about organisational dynamics and the politics amongst the members of the Governing Body, about facing up to difficult issues (what happens when you don’t) and the challenging business of negotiating student fees and rents.

Personal learning about leadership helped me throughout my career. I had formed a mental picture of what was needed. It helped me get a job as executive assistant to the chairman of a large corporation and to grasp quickly the challenging scope of the job and what doing it well looked like. As a CEO today, I still call on deeply etched memories of sitting on a Governing Body in leading my own organisation and, completing the circle, in the Governing Body I sit on today.

Being a student governor can seriously affect your life. Never lose the learning as your career progresses, stop every now and then to reflect on what you have seen and heard – the good, the bad and the indifferent – and make a mental note to use it to become the very best leader you can be.

Dr Mark Pegg is the chief executive of the Leadership Programme. The annual student governor seminar attracts almost 90 students from around the UK and is the first event of the 2013-14 leadership development year.