March 08, 2012

How Can We Fix Our Broken Approach to Boards?

While speaking at a conference of Northern Ireland's nonprofit chief executives last month, I noted that a small but growing number of people are questioning whether the current model of nonprofit governance—a volunteer board drawn from the community (however broadly defined), working in partnership with the chief executive—is so broken that it needs to be scrapped in favor of something better.

I should have known that someone in the audience would then ask a perfectly logical follow-up question: If we got rid of the current model, what would take its place?

Caught off-guard, I sputtered.

I eventually mentioned the author and consultant John Carver's Policy Governance Model, which has been around for more than 20 years and is more a refinement and clarification of the current model than an alternative to it. Policy Governance encourages boards to focus on organizational purposes and goals and to give the chief executive greater clarity about boundaries and expectations.

I also cited Community-Engagement Governance, a framework that was developed through the Alliance for Nonprofit Management. The Community-Engagement approach seeks to expand governance beyond the board to include other constituents and stakeholders. This model also focuses on community impact, the concept of governance as a function rather than a specific structure, and the idea that decision making and power should be shared.

This approach also acknowledges that no one-size-fits-all model works for every group. Each organization will require structures and processes tailored to its needs, size, mission, and stage of development.

In a recent article, the author Judy Freiwirth reports that organizations that use this framework are showing encouraging results. These groups say they have more support for their missions, have improved their ability to collaborate with other organizations, and have increased fundraising capacity and sustainability. She also notes significant challenges inherent in sharing power and decision making.

Considering these two approaches together highlights a central difficulty in proposing a new model of governance: There's no consensus on why many boards don't currently work all that well. And without agreement on what problem we're trying to solve, there's even less agreement about how to make things better.

Mr. Carver's approach attempts to distill and clarify the work of the board, both to help boards become more focused and to make it less likely that boards will interfere with their chief executives in unproductive and arbitrary ways.

That's certainly a problem that bedevils many boards, but is it the main problem?

The Community-Engagement approach seeks to make governance more democratic and inclusive by engaging a much larger group of people in making decisions and setting direction.

At least theoretically, this should help organizations be more responsive to community needs and might also help them engage more people and raise more money.

But is lack of inclusiveness really the major factor that drags down board performance?

Neither approach changes the core of the current model. Both approaches address significant problems experienced by some boards but also add complexity and may create new problems of their own.

I'd be interested in hearing from the leaders of organizations currently implementing either of these models about the benefits and drawbacks. I'd also like to hear from everyone else about whether we need more audacious proposals for new models of governance.

My own two cents: The current model is complicated enough; greater complexity seems likely to produce even worse performance. And boards' current problems may have as much to do with the people we bring onto boards and how we recruit them as it does with structures, models, and definitions.

The next time someone asks me about alternative models for boards, I'd like to have a more complete answer.

Is there a better model for boards?