What do organizations demand of governing
Governance as Leadership
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Governance as Leadership Reframing the Work of Nonprofit Boards
RICHARD P. CHAIT
WILLIAM P. RYAN
BARBARA E. TAYLOR
John Wiley & Sons, Inc.
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This book is printed on acid-free paper. ∞
Copyright © 2005 by BoardSource, Inc.All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
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We collectively dedicate this book to the memory of Judith O’Connor.
In addition, we offer these personal expressions of gratitude:
In memory of Henry W. Sherrill, my governance guru.
Richard Chait
To Sue, Nick, and Peter, for governance respite. William Ryan
Always for David. Barbara Taylor
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Contents
about boardsource x about the authors xi preface xv acknowledgments xxv
chapter 1 First Principles 1 Principle One: Nonprofit Managers Have Become Leaders 2 Principle Two:Trustees Are Acting More Like Managers 4 Principle Three:There Are Three Modes of Governance,
All Created Equal 6 Principle Four:Three Modes Are Better Than Two or One 8
chapter 2 Problem Boards or Board Problems? 11 Problems of Performance 12 From Problems of Performance to Problems of Purpose 15
Some Official Work Is Highly Episodic 17 Some Official Work Is Intrinsically Unsatisfying 18 Some Important Unofficial Work Is Undemanding 20 Some Unofficial Work Is Rewarding but Discouraged 22
The Challenge of Reform 23
chapter 3 Type I Governing: Fiduciary 33 Type I Governing 34 The Type I Mental Map 38 The Type I Board 40 Assessing the Problems 45 Conclusion 49
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chapter 4 Type II Governing: Strategic 51 Nonprofits Enter the Marketplace 52 Boards and Formal Strategy:A Type I Approach
to Type II Work 54 Strategic Disillusionment 56 Strategic Thinking: Beyond a Type I Mindset 62 Governing in Type II Mode 65 The Evolution of Strategic Governance 66 Processes and Structures for Type II Governing 68 Implementing Strategy 75 Why Not Just Types I and II? 76
chapter 5 Type III: Generative Thinking 79 The Power of Generative Thinking in Organizations 80 Inside the Black Box of Generative Thinking 82 Toward Generative Governing 89
Leadership as Governance: Executives Displace Trustees 90 Governance by Default:Trustees and Executives Disengage 93 Governance by Fiat:Trustees Displace Executives 94 Type III Governance:Trustees and Executives Collaborate 94
Can Boards Do It? 99
chapter 6 Type III: Generative Governing 101 Using a Type III Mental Map of the Organization 104 Recognizing Generative Landmarks 107
Generative Landmarks 107 Embedded Issues 108 Spotting “Triple Helix” Situations 109
Working at the Boundary 111 Working at the Internal Boundary 111 Working at the External Boundary 115
Looking Back:The Future in the Rear-View Mirror 116 Deliberating and Discussing Differently 119
The Cardinal Rule: Suspend the Rules 120 Promoting Robust Dialogue 124
Mind the Mode 130 The Payoffs 131
viii CONTENTS
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chapter 7 Working Capital That Makes Governance Work 137
Intellectual Capital 142 Reputational Capital 146 Political Capital 150 Social Capital 155 Capitalizing on Trustees 161
chapter 8 Where to Next? 163 Is the Game Worth the Candle? 163 Diagnostics 167 “Attractive Nuisances” 174 A New Covenant 179 Coming Full Circle 181
references 183
index 189
CONTENTS ix
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About BoardSource
BoardSource is the premier resource for practical informa- tion,new ideas, and leadership development for board members of
nonprofit organizations worldwide. Through highly acclaimed
programs and services, BoardSource enables nonprofit organiza-
tions to fulfill their missions by helping build strong and effec-
tive boards.As the world’s largest, most comprehensive publisher
of materials on nonprofit governance, BoardSource offers a
wide selection of books, videotapes, CDs, and online tools.
BoardSource also hosts a biennial Leadership Forum, bring-
ing together governance experts, board members, and chief
executives of nonprofit organizations from around the world. In
addition to workshops, training, and our extensive Web site,
BoardSource governance consultants work directly with non-
profit leaders to design specialized solutions for organizations of
all sizes working in diverse communities around the world. For
more information, please visit www.boardsource.org, e-mail
mail@boardsource.org, or call (202) 452-6262.
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About the Authors
richard p. chait
Richard Chait, a professor at the Harvard Graduate School of
Education, has studied nonprofit governance for more than 20
years. He has coauthored two books on the subject, Improving the
Performance of Governing Boards (Oryx Press, 1996) and The Effec-
tive Board of Trustees (Oryx Press, 1993), as well as numerous arti-
cles including two in the Harvard Business Review, “The New
Work of Nonprofit Boards” (September/October, 1996) and
“Charting the Territory of Nonprofit Boards” (January/February,
1989). Chait also conducts research on faculty work life and aca-
demic leadership, most recently editing a volume on The Ques-
tions of Tenure (Harvard University Press, 2002).
Dr. Chait is a member of the Board of Directors of
BoardSource and a trustee and member of the executive com-
mittee of the governing board of Wheaton College (MA).
He was previously a trustee of Goucher College (MD) and
Maryville College (TN). Chait has served as a consultant to the
boards and executives of more than a hundred nonprofit organ-
izations, particularly in education and the arts. In 2004, he was
named one of Harvard University’s “outstanding teachers.”
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william p. ryan
Bill Ryan is a consultant to foundations and nonprofit organi-
zations and a research fellow at the Hauser Center for Nonprofit
Organizations at Harvard University. His work focuses on non-
profit organizational capacity, primarily among human-service
organizations. He has explored how several forces—including
nonprofit access to capital, foundation grantmaking practices,
competition with for-profit firms, and nonprofit governance—
shape the capacity of nonprofits to deliver on their missions.
Ryan is author or coauthor of a number of articles on these
topics, including “The New Landscape for Nonprofits” and
“Virtuous Capital:What Foundations Can Learn from Venture
Capitalists” (both in Harvard Business Review), as well as High
Performance Nonprofit Organizations (John Wiley & Sons, 1999).
Before beginning his consulting practice in 1993, he worked in
urban planning for nonprofit and government agencies in New
York City.
barbara e. taylor
Barbara Taylor is a senior consultant with the Academic Search
Consultation Service, a nonprofit executive search firm whose
clients include colleges, universities, and education-related non-
profits. Until 1996, Taylor was, for twelve years, director and
then vice president for programs and research at the Association
of Governing Boards of Universities and Colleges, an organiza-
tion that serves trustees of higher education institutions.
Dr.Taylor is the author or coauthor of eight books, including
Improving the Performance of Governing Boards (Oryx Press, 1996);
Strategic Indicators for Higher Education (Peterson’s, 1996); and The
xii ABOUT THE AUTHORS
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Effective Board of Trustees (Oryx Press, 1993). She has also pub-
lished numerous papers, book chapters, and case studies concer-
ning governance, strategic planning, and institutional financial
condition, including the Harvard Business Review articles,“Charting
the Territory of Nonprofit Boards” and “The New Work of the
Nonprofit Board.” She has consulted with more than 100 non-
profit organizations on issues of governance, board-CEO and
board-staff relations, and organizational assessment and plan-
ning.Taylor is a trustee emeritus of Wittenberg University.
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xv
Preface
Turn back the clock to 1986. One of the authors had an audience with a then education editor of the New York Times
as part of a larger effort to kindle media interest in a study this
researcher had just launched on college boards of trustees. Less
than five minutes into the presentation, the editor interrupted
to proclaim,“Governance is a yawner.What else are you work-
ing on?”
Today, governance has become a front-page story propelled
by a steady flow of articles on acquiescent and negligent corpo-
rate boards, and unbridled (and often unethical) CEOs.A com-
posite picture emerges that depicts boards of directors as insular,
incestuous, and derelict. Nonprofit boards are under attack as
well. Just within the last year, for instance, there have been noto-
rious accounts about self-serving boards of family foundations,
a university board that bungled a presidential search at great
embarrassment and great cost ($1.8 million to settle with the
president-elect), and a prominent independent school board
that paid its headmaster a salary most outsiders regarded as inde-
fensibly excessive.
In the wake of these various scandals, it is safe to say that
almost everyone acknowledges the importance of governance,
at least in theory.What is less clear is whether and how to make
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governing boards important in practice. BoardSource (formerly
the National Center for Nonprofit Boards) has been at the
forefront of these issues with a particular emphasis on feasible,
valuable steps that trustees and CEOs can take to improve in-
stitutional governance.We were invited by BoardSource to con-
sider whether nonprofit governance could benefit from fresh
ideas as a complement to the organization’s work on best prac-
tices. It is this topic, not governance mischief, which is the focal
point of this book. In particular, we were motivated by four
questions:
1. Why is there so much rhetoric that touts the significance
and centrality of nonprofit boards, but so much empirical
and anecdotal evidence that boards of trustees are only
marginally relevant or intermittently consequential?
2. Why are there so many “how-to-govern” handbooks,
pamphlets, seminars, and workshops, but such widespread
disappointment with board performance and efforts to
enhance board effectiveness?
3. Why do nonprofit organizations go to such great lengths
to recruit the best and brightest as trustees, but then per-
mit these stalwarts to languish collectively in an environ-
ment more intellectually inert than alive, with board
members more disengaged than engrossed?
4. Why has there been such a continuous flow of new ideas
that have changed prevailing views about organizations
and leadership, but no substantial reconceptualization of
nonprofit governance, only more guidance and exhorta-
tion to do better the work that boards are traditionally
expected to do?
After many twists and turns, detours and dead ends, these
four questions precipitated this book, one product of a larger
xvi PREFACE
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Governance Futures Project under the aegis of BoardSource
and the Hauser Center for Nonprofit Organizations at Harvard
University.
The book combines two familiar stories—one about leader-
ship and the other about governance—into a new story about
governance as leadership. Strangely enough, governance and
leadership have not been linked before, almost as if each con-
cept has a magnetic field that repels the other. (And remember
that it is like poles, not opposites, that repel.) Nonprofits have
organizational leaders and volunteer trustees.The former lead,
the latter govern.We offer a different formulation: governance
as leadership.
one river, not two streams
A vast intellectual enterprise—with thousands of trade and
scholarly books and hundreds of professional development pro-
grams—has popularized the leadership story, generated new
theory, and inspired new practices. The leadership story has
many contributors: academic disciplines and professions as var-
ied as psychology, sociology, political science, management, and
education; reflections of successful practitioners; analyses of case
studies; and comparative studies across cultures and nations.
From these multiple sources, society has gained a far more
sophisticated and complicated appreciation of leadership.At the
very least, leadership is no longer viewed simplistically, based
upon a single style, model, or aptitude (for example, intelli-
gence, forcefulness, persuasiveness, or charisma). Instead, leader-
ship has become a dynamic, multidimensional concept.
Similarly, the perfect organization was once defined as a
smooth, efficient bureaucracy. Notions are more nuanced now.
Both scholars and practitioners recognize, for instance, that
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organizations are also cultures (Deal and Kennedy, 1982), polit-
ical systems (Baldridge, Curtis, Ecker, and Riley, 1978; Julius,
Baldridge, and Pfeffer, 1999), dynamic organisms (Morgan,
1997), and open systems within a larger, competitive environ-
ment (Scott, 2003). Organizations also can be described meta-
phorically, for example, as theater (Bolman and Deal, 1997),
organized anarchies (Cohen and March, 1974), learning organ-
izations (Senge, 1990), loosely coupled systems (Weick, 1976),
and cybernetic systems (Birnbaum, 1988a).
Now think about the language and metaphors of gover-
nance.They are notably impoverished, a sure sign that the fer-
tile conversations about leadership and organizations have not
yet incorporated governance or addressed the implications for
boards. Currently, there is a narrow conception of boards as
instruments of accountability and conservators (and sometimes
suppliers) of tangible assets. The available images are mostly
operational (for example, fiduciaries or authorizers) or unfavor-
able (for example, rubber stamps or micromanagers).There is no
intellectual ferment that reconsiders trusteeship in light of new
knowledge about leadership and organizations, as if, by analogy,
breakthroughs in genetics had no relevance to the practice of
medicine. In fact, trusteeship—conceptually and practically—
seems to be remarkably unaffected by several generations of
learning about leadership and organizations.
Most literature on trusteeship can be fairly categorized as
either prescriptive or hortatory. There is little, if any, vibrant
debate about what constitutes governance. The floor seems
open primarily to relatively lifeless discussions about how to
govern. Rather than challenge fundamental and popular
notions—the very method that has advanced knowledge about
leadership and organization—the tendency with governance
has been to clarify and codify conventional practice.The con-
xviii PREFACE
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versation centers more around lists of “dos and don’ts” than
around compelling or competing concepts of governance.While
the concept of leadership has been illuminated, the concept of
trusteeship has remained comparatively dim.
Given the very different epistemologies of leadership (and, by
extension, organizations) on the one hand, and governance on
the other hand, one might never guess that both stem from the
same conceptual headwaters. Leadership theory runs swift and
deep, the river banks crowded with animated commentators
and interested observers. Governance theory trickles along the
shallower backwaters; it attracts little notice and even fewer
devotees. One stark statistic highlights the disparity: Barnes
& Noble (Barnes & Noble, 2004) lists 27,220 books with the
keyword “leader”or “leadership,”compared to 2,349 with the key-
word “trustee,”“trusteeship,” or “governance”—a 12:1 ratio.
Despite the differential output, leadership and governance are
closely related, and the more clearly this linkage is seen, the
brighter the prospects will be for better nonprofit governance.
It is in this spirit that we treat governance and leadership not
as separate stories that shape two distinct areas of practice, but as
two intertwined plot lines in a much larger story about modern
nonprofit organizations.We do not invent new theories about
leadership or organizations; rather, we use these theories as cat-
alysts to produce new concepts and practices about nonprofit
governance. We turn next to who might find this larger story
and these new notions of interest.
target audiences
All three authors of this book are students of governance, con-
sultants to boards, and trustees of nonprofit organizations. And
at one time or another, we all worked as full-time administra-
PREFACE xix
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tors in not-for-profit institutions. Based on these experiences,
we can explore governance from several angles and address the
interests and concerns of people in all four of these roles.
While we aim to engage the interests of scholars and board
consultants, the target audiences for this book are the nonprofit
trustees, CEOs, and senior staff who meet Donald Schon’s def-
inition of reflective practitioners: people who “often think
about what they are doing, sometimes even while doing it”
(1983).These individuals, Schon continues:
turn thought back on action and on the knowing which is implicit in action . . . There is some puzzling, or troubling, or interesting phenomenon with which the individual is trying to deal.As he tries to makes sense of it, he also reflects on the under- standings which have been implicit in his action, understandings which he surfaces, criticizes, restructures, and embraces in further action (1983).
In other words, this book will appeal most to nonprofit trustees
and executives inclined not just to do governance, but to under-
stand it as well—not to gain knowledge for its own sake but
because they realize that a better understanding of governance
leads to governing better. This, in turn, circles back to deeper
understanding.As David Smith observed in Entrusted:The Moral
Responsibilities of Trusteeship, effective boards “must become a
reflective community of interpretation” where trustees “can and
do talk seriously about organizational purpose” (1995) and, we
would add, about the nature of governance. Conversely, trustees
and staff who regard governing as little more than bright peo-
ple using common sense and doing what comes naturally prob-
ably need read no further.
This book takes trustees and trusteeship seriously.We believe
that board members want more than simple recipes for better
xx PREFACE
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trusteeship (for example, strengthen standing committees),
deserve more than menus of maxims (for example, the board
sets policy that management implements), and need more than
a governance maven’s advice du jour (for example, place the
organization’s mission statement on the back of business cards
for trustees). Based on extensive personal experience with non-
profit boards throughout the sector, we are confident that
trustees, with remarkably few exceptions, can understand and
apply new thinking about governance. Governance does not
need to be oversimplified; most board members—as professionals,
executives, or community leaders—have already demonstrated
the ability to grasp new ideas and handle complex situations.
Perhaps the greatest value will accrue to boards of trustees
that read this book in tandem with their organization’s CEO
and then consider together what changes would improve the
quality and centrality of institutional governance. Boards and
CEOs are intertwined and interdependent. And while power
struggles between the board and the chief executive officer
may grab the headlines, more collaborative governance part-
ners generally grab the brass ring. We do not advance here
more precise delineations of the relative power and exclusive
provinces of boards and executives. Countless efforts to do so
have yielded either no fruit or bitter fruit because attempts to
redistribute formal authority between the board and the CEO
usually precipitate a zero-sum stalemate. However, initiatives to
expand leadership opportunities for the board and the CEO, as
we propose, promote better governance. At worst, challenges
will not arise when a board or a CEO has too much authority,
but rather when an organization has abundant sources of
leadership to tap—a problem most nonprofits would welcome
gladly.
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We address this book to the not-for-profit sector at large, not
at any one particular segment such as arts, education, environ-
ment, health care, or social services. While there certainly are
differences among nonprofit organizations, for instance, history,
mission, markets, strategy, and scale, the fundamental nature of
governance and the essence of trusteeship are quite similar, if
not universal, to the sector.Therefore, we write to a broad audi-
ence: nonprofits with volunteer boards and a professional staff.1
structure of the book
This book is divided conceptually into three parts.This and the
next chapter provide a backdrop that sets the stage to view gov-
ernance as tantamount to leadership. The next four chapters,
which constitute the second part, describe the three modes of
governance which, taken together, constitute governance as
leadership. The first two of these four chapters cast familiar
scenery in a new light as we discuss the fiduciary and strategic
modes of governing.The next two place the generative mode,
a less familiar concept of trusteeship, at center stage. In the final
section of the book, we shift from ideas to action, and focus on
practical, constructive steps that boards can take, with senior
staff, to work effectively in the generative mode and to add
greater value to the institutions they govern.
xxii PREFACE
1The book does not address all-volunteer organizations and political associations. We also do not consider policies, laws, and regulations de- signed to demand better governance from nonprofit boards. While we appreciate the value (and limitations) of that approach, we focus on inter- nally generated efforts boards can take toward the same objective: improved governance.
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Chapter 1 outlines four “first principles” that emerged as
important premises and pervasive themes of the book. We
urge readers to start here as these ideas underlie all the chapters
that follow.
Chapter 2 confronts and redefines the problems with non-
profit boards. Whereas most literature on trusteeship addresses
the problem of inadequate performance of boards, we treat this
as symptomatic of a very different and more critical challenge:
a problem of purpose.
Chapter 3 examines the most basic work of the board: the
fiduciary mode. We consider the need to do fiduciary work,
while avoiding the trap of becoming a fiduciary board, mired in
the most traditional mode of governing. This chapter suggests
that there is more to governing than stewardship of assets and
more to fiduciary work than most boards appreciate.
Chapter 4 concerns the strategic mode, or the board’s work
vis-à-vis organizational strategy. We start with the more con-
ventional view—boards as overseers of formal strategy—and
then propose more consequential work where standard struc-
tures and processes are modified in order to focus the board on
strategic thinking and action.
Chapter 5 introduces the concept of generative work—work
that provides a new sense of the problems and opportunities at
hand. We discuss the power of generative work and three
processes by which to do it. The chapter makes the case that
generative work, usually subsumed under the rubric of leader-
ship, actually constitutes the essence of trusteeship—work best
performed by the board in concert with the CEO.
Chapter 6 marks the transition from concept to practice,
from generative work to generative governance. Here we pres-
ent a set of integrated approaches to move up the generative
PREFACE xxiii
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curve where boards can do more work of greater import.
Governing in the generative mode means looking for clues,
operating at the organization’s boundaries, framing issues, en-
gaging the collective mind of the board in robust discussions,
being forensic as well as futuristic, and tracking unconventional
indicators of organizational performance.
Chapter 7 identifies the most valuable asset mix that trustees
can contribute to governance as leadership. The chapter dis-
cusses four forms of capital—intellectual, reputational, political,
and social—that trustees offer, and suggests how to generate and
deploy this capital at a high rate of return to the organization.
In the final chapter, we offer executives and trustees some
advice for starting their work with governance as leadership.
Because most organizations are not starting with a blank slate,
these final thoughts sketch the challenge of integrating gover-
nance as leadership into the organization’s current structures
and culture.
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xxv
Acknowledgments
Quite simply, without the late Judith O’Connor, then CEO and President of BoardSource, there would have been no
Governance Futures Project and no book entitled Governance as
Leadership. Judy recognized the need to infuse nonprofit gover-
nance with new concepts. She assembled the project team,
acquired the necessary resources, and offered invaluable advice
and constant encouragement.
We were the beneficiaries of wise counsel from others as
well, especially the Project Advisory Group, which included:
Christine Letts and Mark Moore of the Hauser Center for
Nonprofit Organizations at Harvard University, Judith Saidel
from the State University of New York at Albany, and Marla
Bobowick from BoardSource.We also profited from instructive
conversations with an array of noted theorists on leadership,
organizations, and nonprofit governance: Alan Altshuler, James
Austin, L. David Brown, Marion Fremont-Smith, Howard
Gardner, Steven Greyser, Daniel Halperin, James March, Henry
Mintzberg, Gareth Morgan, Charles Nesson, Jeffrey Pfeffer, Fred
Schauer, Frances Van Loo, and Christopher Winship. Early in the
project, we convened some very wise practitioners to “test
drive” a “concept car” we had designed. Based on the sage advice
we received from Susan Dentzer,Thomas Gottschalk, Raymond
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Henze III,Thomas Jarom, Harold Jordan, David Nygren, Roger
Raber, and Gary Walker, we returned to the drawing board with
many improved ideas.
Early in our efforts to reassess the problems and potential of
boards, we gained from the insights of the participants in the
California Board Summit, cosponsored by BoardSource and
the California Management Assistance Partnership. A group of
experienced consultants to nonprofit boards assisted us in a sim-
ilar pursuit: Mike Allison, Bob Andringa, Nancy Axelrod, Mike
Burns, Denise Cavanaugh, Paul Connolly, Bruce Lesley, Chuck
Loring, Fred Miller, Richard Novak, and Michela Perrone.
We are especially indebted to Jared Bleak, a recent doctoral
student at the Harvard Graduate School of Education and now
Dr. Bleak. Jared somehow managed to chronicle the two dozen
or so disorderly discussions we had as a team over the life of the
project. He also made important substantive contributions to
our deliberations, tracked down scores of references and, not
least, always made sure we, quite literally, had food for thought.
Jared did all this with unfailing excellence, diligence, good will,
and sharp wit.
As we approached the deadline for the manuscript, we were
fortunate to enlist Megan Tompkins, an unusually able and
meticulous graduate student at the Harvard Graduate School of
Education, to fill in the blanks on many references and citations.
Finally, we are grateful for the generous support of The
David and Lucile Packard Foundation,The Atlantic Philanthro-
pies, the Surdna Foundation, and the W.K. Kellogg Foundation.
xxvi ACKNOWLEDGMENTS
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1
First Principles
We present here a set of first principles—basic premises that underlie the chapters that follow. Much like the overture to a
Broadway show that can only be written after the composers
have finished the score, we developed these principles toward
the end, not the start, of the work that produced this book.
These were not preconceived notions that generated predeter-
mined content.To the contrary, this chapter appears first but was
actually written last. We were only able to discern some first
principles retrospectively because the propositions emerged as
we discussed and drafted the other chapters. Only then did we
notice some familiar refrains.
There are two ironies here. First, we maintain in Chapter 5
that organizations discover “emergent” strategies as well as
design “deliberate” or planned strategies. Strategies, in effect,
sneak up on organizations much as first principles sneak up on
authors. Second, we contend in Chapter 5 that effective gover-
nance rests heavily on a board’s capacity for retrospective “sense-
making”—acting and then thinking,making sense of past events
to produce new meanings.We arrived at a new construct, gov-
ernance as leadership, by writing and then reflecting, reframing,
and revising—and by rethinking where governance stands today
and why.While we never expressly intended to do so, the way
chapter 1
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we worked and the sense we made of governance echo the leit-
motif of this book.The four principles summarized here distill
recurrent themes and foreshadow arguments amplified in other
chapters. To return to the analogy of the Broadway musical,
these synopses are a medley, not the score.
principle one: nonprofit managers have become leaders
Nonprofit managers are not what they used to be, and most
board members would probably respond “Thank goodness.”
Historically, the stereotypical image of a nonprofit administrator
was a well-intentioned “do-gooder,” perhaps trained as a social
worker, educator, cleric, artist, or physician.The most successful
practitioners—utterly unschooled about management, finances,
investments, strategies, labor relations, and other “real world”
realms—reluctantly, and sometimes accidentally, assumed greater
managerial responsibility and eventually ascended to the top
of the organization.Yesterday’s naive nonprofit administrator or
executive director has become today’s sophisticated president
or CEO, titles that betray changes in the stature, perception, and
professionalism of the positions. (Likewise, staff have become
“line officers” with such businesslike titles as vice president of
marketing, strategy, technology, or knowledge management.)
Many executives have earned graduate degrees in nonprofit
management from reputable universities; even more have
attended executive education seminars and institutes on these
same prestigious campuses. More important, nonprofit execu-
tives have acquired what formal education alone cannot confer:
standing as organizational leaders (a status often underscored by
the compensation package). As a result, trustees, employees,
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clients, and donors expect far more of nonprofit CEOs today
than a genial personality, moral probity, managerial acumen, and
a passionate commitment to the organization’s social mission.
Stakeholders, in a word, expect leadership.
Constituents expect nonprofit CEOs to articulate clearly
and persuasively the organization’s mission, beliefs, values, and
culture. Both the process and the substance should galvanize
widespread commitment toward these ends. With input from
stakeholders inside and outside the organization, leaders are
expected to shape agendas, not impose priorities; to allocate
attention, not dictate results; and to define problems, not man-
date solutions. These expectations we now have for leaders
closely resemble conventional notions of governing.
In the not-for-profit context, governing means, to a sub-
stantial degree, engaging in these very activities. In theory, if not
in practice, boards of trustees are supposed to be the ultimate
guardians of institutional ethos and organizational values.Boards
are charged with setting the organization’s agenda and priori-
ties, typically through review, approval, and oversight of a stra-
tegic plan. Boards are empowered to specify the most important
problems and opportunities that management should pursue.
If this logic holds, as we contend, then many nonprofit execu-
tives are not only leading their organizations, but by practicing
this new version of leadership, they are actually governing them
as well.
The transition from nonprofit administrators to organiza-
tional leaders has been almost universally heralded as a positive
development.Almost everyone touts the value of leaders and, in
any case, that is not at debate here. If, however, managers have
become leaders, and leadership has enveloped core elements of
governance, then a profound question arises: What have been
FIRST PRINCIPLES 3
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4 GOVERNANCE AS LEADERSHIP
the consequences to boards as the most powerful levers of gov-
erning have migrated to the portfolio and purview of leaders?
principle two: trustees are acting more like managers
While nonprofit managers have gravitated toward the role of
leadership, trustees have tilted more toward the role of man-
agement. The shift has occurred because (as described in the
Preface) trusteeship, as a concept, has stalled while leadership, as
a concept, has accelerated.The net effect has been that trustees
function, more and more, like managers.
This will no doubt strike many as an unlikely claim since the
number one injunction of governance has been that boards
should not meddle or micromanage. Despite this oft-repeated
admonition, much of the prescriptive literature on trusteeship
actually focuses squarely on operational details: budgets, audits,
facilities, maintenance, fundraisers, program reviews, and the
like.To discharge that work, most boards structure committees
around the portfolios of line officers: finance, development,
government relations, program evaluation, and customer/client
relations, for example. Moreover, management competence typ-
ically ranks high on the list of desired attributes of prospective
trustees. Nonprofits usually want a Noah’s ark of professional
experts.As a result, many boards resemble a diversified consult-
ing firm with specialties in law, labor, finance, marketing, strat-
egy, and human resources. Constructed and organized in this
way, boards are predisposed, if not predestined, to attend to
the routine, technical work that managers-turned-leaders have
attempted to shed or limit.
With sophisticated leaders at the helm of nonprofits, a sub-
stantial portion of the governance portfolio has moved to the
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executive suite.The residue remains in the boardroom.This sur-
prise twist in the story line suggests that the real threat to non-
profit governance may not be a board that micromanages, but a
board that microgoverns, attentive to a technical, managerial ver-
sion of trusteeship while blind to governance as leadership.
This quandary of migratory governance could be viewed as a
winner-take-all joust between the CEO as the leader and the
board as a source of leadership. Or the problem could be framed
as a zero-sum contest in which trustees must forego the “bread
and butter,” canonical components of governance (for example,
finances, facilities, strategy, and development) in order to reclaim
from executives a significant measure of influence over the
most potent facets of governance (for example, mission, values,
beliefs, culture, agendas). However, the formulation of gover-
nance as leadership provides a more affirmative and constructive
approach that expands the pie, provides more occasions and
levers for leadership, and enhances the trustees’ value to the organ-
ization. Just as significantly, governance as leadership enhances
the organization’s value to trustees. Board members will become
more fulfilled and less frustrated as opportunities multiply for
meaningful engagement in consequential issues. Toward that
end, governance must be recast from a fixed and unidimensional
practice to a contingent, multidimensional practice with three
distinct yet complimentary modes. In other words, governing is
too complicated to reduce to simple aphorisms, however seduc-
tive, like “boards set policies which administrators implement”
or “boards establish ends and management determines means.”
Although new when applied to governance,“complexity” is
now routinely accepted in other realms. In fact, “complexity
science” (Zimmerman, Lindberg, and Plsek, 1998) and “com-
plex systems” (Scott, 2003) have already entered the lexicon of
organizational behavior. There are two obvious analogues to
FIRST PRINCIPLES 5
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6 GOVERNANCE AS LEADERSHIP
governance. First,“intelligence” once denoted analytical horse-
power. Then, Howard Gardner introduced the concept of
“multiple intelligences” (1983) which conceptualized personal
competence as a varied repertoire. Intelligence could be denom-
inated as linguistic, logical, spatial, kinesthetic, musical, inter-
personal, and intrapersonal.1 Second, leadership over the years
has been (almost sequentially) associated with certain physical
attributes and personality traits, then with power and influence,
then with specific realms of expertise (for example, interper-
sonal skills, analytical skills, financial acumen), and then with
particular activities (for example, planning, decision making).
Now both theoreticians and practitioners realize that effective
leaders are “cognitively complex” (Birnbaum, 1992), that is,
able to think and work effectively and concurrently in multi-
ple modes: for instance, as managers, entrepreneurs, politicians,
visionaries, analysts, learners, icons, and culture makers.
Effective leaders move seamlessly from mode to mode as
conditions warrant. Executives do not simply learn one mode
or even two and then employ that mode regardless of the situ-
ation. Regrettably, trustees often do just that.
principle three: there are three modes of governance, all created equal
We posit that there are three modes of governance that com- prise governance as leadership:
• Type I—the fiduciary mode, where boards are concerned
primarily with the stewardship of tangible assets
1Gardner (1993) later proposed naturalist, spiritual, and existential intelli- gence and Goleman (1995) popularized “emotional intelligence.”
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• Type II—the strategic mode, where boards create a strategic
partnership with management
• Type III—the generative mode, where boards provide a less
recognized but critical source of leadership for the organi-
zation.
When trustees work well in all three of these modes, the board achieves
governance as leadership.
Each type emphasizes different aspects of governance and
rests on different assumptions about the nature of organizations
and leadership. However, all three types are equally important; each
fulfills vital purposes.Types I and II are, at present, the dominant
modes of nonprofit governance; Type III is the least practiced
(see Exhibit 1.1).
Type I constitutes the bedrock of governance—the fiduciary
work intended to ensure that nonprofit organizations are faith-
ful to mission, accountable for performance, and compliant with
FIRST PRINCIPLES 7
Governance as
Leadership
Ty pe
I
Fi du
ci ar
y Type II
Strategic
Type III Generative
exhibit 1.1 governance as leadership: the governance triangle
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relevant laws and regulations. Without Type I, governance
would have no purpose. If a board fails as fiduciaries, the organ-
ization could be irreparably tarnished or even destroyed.Type II
concerns the strategic work that enables boards (and manage-
ment) to set the organization’s priorities and course, and to
deploy resources accordingly. Without Type II, governance
would have little power or influence. If a board neglects strat-
egy, the organization could become ineffective or irrelevant.
Types I and II are undeniably important forms of governance.
However, boards that only oversee assets and monitor strategy
do work that is necessary but not sufficient to maximize the
value of governance (generally) and the value of trustees (more
particularly).
As one moves through the chapters that follow, it may appear
that we assign greater importance to the generative mode or, at
a minimum, that we position Type III as the first among equal
modes. In truth, we assert no hierarchy of modes, and we do not
advocate that boards abandon or neglect Types I and II.To the
extent that we elevate Type III to prominence (and we do
devote more attention to Type III), we do so not because Type
III trumps I and II, but because the generative mode is less rec-
ognizable to nonprofit trustees and executives than the other
modes and thus requires more elaboration.The disproportion-
ate attention owes to the relative novelty, not the relative worth,
of Type III vis-à-vis Types I and II.
principle four: three modes are better than two or one
A board’s effectiveness increases as the trustees become more
proficient in more modes. If the term “triple threat”—high
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praise for an athlete—did not carry a negative connotation
when attached to governing boards, we would adopt this phrase
to convey the idea that exemplary boards perform skillfully in
all three modes. Instead, we make do with “tri-modal.”
In any case, a board that excels in one mode (or two) but
flounders in another one (or two) will add far less value to an
organization than a board that ably executes all three.Trustees
quick to exhort the staff to outwit, outwork, and even out-
spend the competition might consider an additional tactic:
outgovern the competition. The greatest comparative advantage
will accrue to “tri-modal” boards. In order to create more value,
boards of trustees need to “cross-train” so that the “muscle mem-
ory” of one mode does not dominate to the detriment of the
others. (This is one reason why world-class weightlifters are
usually inept basketball players.) When boards overemphasize
one mode to the exclusion of others (a common problem), the
net results are worse, not better, governance.
The majority of boards work most of the time in either the
fiduciary or strategic mode. These are comfortable zones for
trustees. Nonetheless, many boards neither overcome the inher-
ent challenges that Types I or II pose nor capitalize on the occa-
sional leadership opportunities that fiduciary and strategic
governance present.As a result, some of the board’s potential to
add value goes untapped, despite the trustees’ familiarity with
the mode. However, there may be an even steeper price to pay
if boards overlook or underperform Type III work because,
unlike Types I and II where there are moments for leadership,
the generative mode is about leadership. It is the most fertile
soil for boards to flower as a source of leadership.
Chapters 3 and 4 on Types I and II challenge boards to do
better at what boards normally do; no one should discount the
FIRST PRINCIPLES 9
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value of continuous, incremental improvements as applied to
trusteeship. By contrast, Chapters 5 and 6 on Type III invite
(some might say compel) boards to invent new governance
practices. Taken together, all three modes encourage nonprofit
trustees and executives to combine ideas and practices, some
familiar, others novel, into a new approach: Governance as
Leadership.
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11
Problem Boards or Board Problems?1
There is no question that the nonprofit sector has a board problem. Frustration with boards is so chronic and widespread
that board and troubled board have become almost interchange-
able.When we describe boards it is often to distinguish one bad
one from another: Letterhead board or micromanaging board?
Founder’s board or rubber-stamp board? And when a nonprofit
executive says,“I have a really good board,” savvy listeners know
this often means “I have a compliant board.” The confessions
of board members are equally disheartening. Many find serving
on boards to be an exercise in irrelevance, summed up in two
questions many trustees ask themselves: “Why am I here?” and
“What difference do I make?” Of course, there is more at stake
than boredom. The board appears to be an unreliable instru-
ment for ensuring accountability—the outcome society most
wants from it. Behind every scandal or organizational collapse
is a board (often one with distinguished members) asleep at the
switch. And while it is true that a board is behind every high-
chapter 2
1Parts of this chapter were published in The Nonprofit Quarterly, Summer 2003.
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performing organization, it is often along for the ride, cheering
and boosting the work of the executive and staff.
A cottage industry (in which the authors toil) has emerged to
help nonprofits deal with these problems. Training programs,
consulting practices, academic research, and practical guide-
books all promise a way out of the morass.Virtually all of these
solutions are based on the same diagnosis of board problems.
And because a solution can be no better than the diagnosis that
precedes it, we start in this chapter with the diagnostic consen-
sus of the board-improvement field.We conclude that the field
has been working on the wrong problem, or, more precisely,
that we have mistaken a part of the problem for the whole. In
order to develop better solutions, we need a better picture of
the problem.
problems of performance
Most diagnoses in the board-improvement field focus on three
prevalent problems of performance. First, both board members
and analysts have long believed that the common dysfunctions
of groups—rivalries, domination of the many by the few, one-
way communication, and bad chemistry—prevent effective
deliberating and decision making by boards. The father of the
nonprofit board-improvement industry, General Henry M.
Robert, found disorderly discourse to be the biggest problem
facing the boards and associations he served in the nineteenth
century. Some dominated the discussion, conversations were
endless, or both. With intimidating detail, he tried to remedy
these group-dynamic problems with the now famous Robert’s
Rules of Order (Robert III, Evans, Honemann, and Balch, 2000).
Our conception of successful group work has changed over the
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years. Rather than parliamentary procedure, we are more apt to
encourage free-flowing discussions and to try team-building
exercises that promote trust, commitment, and collaboration.
But the group-dynamic diagnosis remains.
Second, board members are frequently faulted for being dis-
engaged.They are faulted for not knowing what is going on in
their organizations and for not demonstrating much desire to
find out.Attendance at board meetings is often spotty and par-
ticipation perfunctory.The disengagement problem has inspired
its own hackneyed images:“no-show trustees” and board mem-
bers who “check their brains at the door.” Analysts have sug-
gested a variety of carrots and sticks to improve the situation.
The idea of paying nonprofit trustees, though rarely practiced,
is periodically proposed. Some organizations try to increase psy-
chic and social rewards, with more opportunities for gratifying
contact with clients, more interesting social interactions with
fellow trustees and donors, and (occasionally) more direct ben-
efits like favored treatment for family and friends. In recruit-
ing, some boards actually encourage the disengagement they
later lament: They promise prospective board members that
there will be little work to do, in the hope that low expectations
will attract more prospective board members. Policy makers and
legal analysts have argued that the solution lies outside the board
room.Some argue that if laws were changed to make board mem-
bers personally liable for a wider variety of organizational fail-
ures, then trustees would pay more attention. Others argue the
opposite—that liability discourages service on nonprofit boards,
and that trustees should be shielded from such risks (“Volunteer
Protection Act of 1997,” 1997).
But a third problem—more than any other—has captured
the imagination of the board-improvement field and inspired
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14 GOVERNANCE AS LEADERSHIP
many common solutions. In this diagnosis, boards do not per-
form well because they do not know what their job is.When
we discussed with 28 nonprofit governance consultants their
recent engagements with troubled boards, 19 characterized the
client’s problem as ignorance of or confusion about roles and
responsibilities. Dozens of analysts have offered one version or
another of an “official job description” for the board.This pre-
scriptive literature can be distilled into five functions:
1. Set the organization’s mission and overall strategy, and
modify both as needed.
2. Monitor organizational performance and hold manage-
ment accountable.
3. Select, evaluate, support, and—if necessary—replace the
executive director or CEO.
4. Develop and conserve the organization’s resources—both
funds and facilities.
5. Serve as a bridge and buffer between the organization and
its environment; advocate for the organization and build
support within the wider community.
This roles-and-responsibilities approach to board performance
has obvious appeal. With the problem defined as confusion
about roles and responsibilities, the solution becomes clarity,
and the holy grail becomes an unambiguous official job de-
scription. Ironically, in most work environments, the specificity
of job descriptions increases as one descends the organization
chart.Yet, here, nominally at the top of the organizational pyra-
mid, trustees and executives seem to think that nonprofit
organizations need only specify the board’s role to cure the
board’s problem. In effect, boards can codify their way out of
board problems.
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The official job description is a reasonable point of depar-
ture to address the problems of new boards or inexperienced
trustees. Even more established boards, with members who
should know better, can drift into seductive but random activ-
ities that create little or no value for their organizations. Re-
visiting the official job description probably helps them, too.
But the frustration with nonprofit boards, and of nonprofit
board members, is not about inexperience.The bigger problem
is the disappointing performance of mature boards with sea-
soned members.These are talented individuals and experienced
trustees; their feeble performance is therefore especially dis-
heartening. The conventional problems of performance—
particularly confusion about roles and responsibility—offer an
inadequate diagnosis.
from problems of performance to problems of purpose
We contend that another problem looms behind these problems
of performance: a more fundamental problem of purpose. Some
advocates of the roles-and-responsibilities approach inadver-
tently acknowledge the problem of purpose when they reason
that the board must be important since it endures as an institu-
tion.“The widespread existence of boards,” wrote Cyril Houle,
“means they must possess values which are apparently essential
to modern life. It will therefore be useful to assess the reasons
why boards are important” (1960).The very formulation of this
approach raises a troubling question. If the board is so impor-
tant, why is a whole literature required to explain why it is so
important? What if one of the central problems plaguing the
board is not, in fact, uncertainty about its important roles and
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16 GOVERNANCE AS LEADERSHIP
responsibilities, but rather a lack of compelling purpose in the
first place? We maintain that many board members are ineffec-
tual not just because they are confused about their role but
because they are dissatisfied with their role.They do not do their
job well because their job does not strike them as worth doing
well. In other words, we believe that board members them-
selves—in asking “Why am I here?” and “What difference do I
make?”—have offered the best diagnosis of all.
This diagnosis is more illuminating if one asks not just whether
boards are vulnerable to problems of purpose but where. Is the
problem with the board’s most important, official governing
work? Or with less important, unofficial work? If governance is
the use of authority to set an organization’s purposes and to
ensure it serves those purposes effectively and efficiently, then it
follows that some of what boards do is not actually governing.
Informal coaching of a CEO, advising and troubleshooting with
staff outside of board meetings, volunteering on the front lines
of service delivery—boards might perform these functions, and
they might inform a board’s governing, but they are not gov-
erning per se.They represent unofficial, though not unimpor-
tant, work.
Even among the board’s official governing assignments, it is
possible to deem some duties more essential than others. To
make this distinction, it helps to ask which duties one can imag-
ine a board delegating entirely—either to staff or consultants—
and still claim to be governing the organization. Farming out
fundraising and community relations (both of which are often
shared among staff, consultants, and celebrity ambassadors) does
not threaten governance in a fundamental way. But a board that
outsources mission setting or management oversight is highly
problematic, as troubling as a government that puts legislating or
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judicial sentencing out to bid along with trash hauling and
street cleaning.Yes, it is all government or, in this case, gover-
nance. But some is more essential than the rest.
With these distinctions in mind, we can offer a refined diag-
nosis: Boards are vulnerable to problems of purpose both in
their official and their unofficial work. As result, it is not just
trustee satisfaction that is at risk but also effective governing.
Consider four manifestations of the purpose problem:
Some Official Work Is Highly Episodic
Most people take little account of the fact that much of the offi-
cial work of the board is highly episodic. There is not, thank-
fully, always a CEO to hire or fire, or a major question of mission
to consider. Yet board members meet at regularly prescribed
intervals as if there were always important governing work to do.
In most fields where important work is episodic, practitioners
do not insist (or pretend) otherwise. Effective fire companies are
not always fighting fires; fire departments put their downtime to
good use—engaging in training, maintenance, and fire preven-
tion.The same cannot be said for boards.
By denying the episodic reality of governing work, boards
back into a problem of purpose. If there are no urgent matters
of governance before the board, meetings are devoted to pre-
senting routine committee reports. To ward off this boredom,
many organizations have begun over-relying on the board’s role
as strategy maker—cramming the agenda with as many inter-
esting strategy questions as possible. Many boards now expect
agendas replete with “bet-the-company” questions.To meet this
demand for strategic content, staff sometimes inflate routine
issues into questions of strategy. Before long, board members
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and staff alike begin to equate meeting with governing. It is at
these meetings where everything comes wrapped in strategy,
but where little or nothing truly important is at stake, that board
members start to wonder,“What difference am I making?”
Ironically, the most valued contributions of board members
often come during downtime—when there is no indispensable
governing work to do. For example, we frequently ask board
members to think about a “no-board scenario” by posing the
following question: “What would be the single gravest conse-
quence to your organization if your board did not meet or
conduct board business in any way for a two-year period?”The
most common responses are the loss of fundraising capacity,
loss of good advice or expertise, and loss of contacts in the
community. Over the course of these two hypothetical years
without a board, few people fear the result will be mission
drift, strategic blunder, or a compromising of core values.They
acknowledge, in effect, that the board’s essential governing
work is episodic, but that it does other important work in the
interim. Unfortunately, the structure and culture of most
boards precludes this acknowledgement:Trustees keep right on
meeting, even as they are disappointed by the lack of meaning
in their work
Some Official Work Is Intrinsically Unsatisfying
Not all of the board’s governing work is episodic. Overseeing
and monitoring the organization’s managers—to spot problems
or malfeasance—is ongoing and critically important.The “mon-
itoring and oversight” duty in the official job description is
really a response to the fundamental legal demand that society
makes of boards. By law, boards are to be responsible to the
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broader community for what their organizations do—and espe-
cially for what they do wrong. The law demands that boards
meet their “duties of loyalty and care,” which means focusing on
norms and standards of minimally acceptable behavior. In effect,
trustees are tasked to prevent trouble rather than promote suc-
cess. But their method for doing this compounds the problem
of purpose: Routine oversight is hardly engaging.
In fact, a job designed primarily for oversight violates virtu-
ally all we know about motivation. Board members, in partic-
ular, join organizations because of the meaning the affiliation
provides.They identify with and want to support the mission,
cause, or values of the organization (Taylor, Chait, and Holland,
1991). Who has ever been moved to join a board thinking, “I
really want to hold this organization to account?” But this is, of
course, a good part of what the job demands.And while people
might agree to join in order to affiliate with a mission, they are
more apt to participate when they can see the results of their
work and the opportunity to have influence. Here again, over-
sight activity is a disappointment. Oversight is more looking
than finding. And the work of looking is often technical—
scrutinizing budgets, financial statements, or construction plans—
and often tedious to boot. It is as if eager Peace Corps volunteers
arrived at their posts only to find their main job was to ensure
that foreign aid was not misspent.
In effect, by constructing their job around the fiduciary work
of oversight, nonprofit organizations have placed board mem-
bers in a position akin to that of a substitute teacher.As an insti-
tution, the substitute teacher works effectively. It assures school
administrators and parents that children who might run amok
in the absence of a teacher remain under control. But the work
of the substitute teacher is singularly unattractive.Adherence to
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minimum standards—not trying to teach, but merely trying to
keep order—is as (or more) challenging than actually teaching.
It is also far less rewarding. Board members suffer from this sub-
stitute’s dilemma. Society has essentially asked trustees to keep
order.As a result, board members become disengaged.The more
disengaged they become, the less likely trustees are to ensure
accountability—the very reason we created boards in the first
place. By asking for a little, we get even less.
If the problem of purpose is most acute with the board’s
official governing work, it is tempting to conclude that looking
for unofficial work might provide sufficient appeal to keep
board members engaged in their essential governing work.And
to some extent, this is what boards commonly do. But this path
to meaningful engagement is blocked on two fronts.
Some Important Unofficial Work Is Undemanding
Some of the board’s most important unofficial work does not
really depend on the efforts of individual board members, and
therefore does not provide them with opportunities for mean-
ingful engagement. This partly explains why boards can be so
important to their organizations yet so unrewarding for their
own members.This type of work poses for board members the
predicament of the monarch in a modern, democratically gov-
erned state.While the institution of the monarchy helps create a
national identity, reassures and unifies the country in times of
crisis, marks important events through ceremony, and develops
the tourism economy, the individual monarch deserves little
credit for any of these results. And to the extent that the work
involves endless ribbon cuttings, award ceremonies, and grand
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parades, there is not much stimulation either. Boards and board
members are similar in at least three respects:
First, a board can create legitimacy for an organization. Unlike
the business sector, where stakeholders can judge a corporation
by financial performance, observers in the nonprofit sector tend
to rely on a number of proxies to determine what constitutes a
good organization. Potential funders, clients, and even employ-
ees look at an organization’s board—especially if it is a distin-
guished one—as evidence of legitimacy.They are far more apt
to ask “Who is on your board?” than “What does your board
do?” Board members need not do anything to create legiti-
macy—beyond lending their names to the organization’s letter-
head and occasionally attending a public function or official
event associated with the organization. The board’s very exis-
tence creates legitimacy.
Similarly, the board provides managers what organizational
theorists call “sense-making opportunities” simply by meeting (see
Chapter 5).The mere prospect of a board meeting—where little
or nothing may actually happen—forces managers to prepare
written and oral reports that make sense of organizational events,
recent challenges, and data about performance. Management
must be able to communicate to the board an integrated and
sensible account that describes and interprets the organization’s
situation. Presumably, a more inquisitive board will compel man-
agers to be better sense-makers, but the mere occasion of board
meetings goes a long way by itself. A board meeting could be
canceled at the last minute and something good—more thought-
ful and focused management—would still have resulted.
As an entity, the board also encourages vigilance by managers.
Nonprofit executives often say, “The board keeps me on my
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toes” or “I can feel the board looking over my shoulder.”As use-
ful as this is to the organization, keeping managers “on their
toes” is not likely to be engaging for board members, any more
than state troopers find it stimulating to park at the side of
the road because their mere presence slows traffic.Troopers can
keep drivers on their toes while they themselves are literally
asleep at the wheel.
Some Unofficial Work Is Rewarding but Discouraged
If official work is too episodic or tedious, and if some unofficial
work is more institutional than personal, board members have
the option of participating in other, more gratifying unofficial
work. Boards of new organizations, even organizations with
full-time staff, participate routinely in much of the hands-on,
day-to-day work of the organization. As a result, they know
why they are there and what difference they make. In doing this
work,however, board members are repeatedly reminded that they
must not cross the line into “micromanaging” or “meddling.”
The rules about what constitutes permissible board work are
somewhat mysterious. Fundraising, advocacy, and community
relations make the short list of official duties, but human-
resource management and program development do not.Why?
It is true that organizations can never have too much money or
influence, or too many friends. Board members are often good
at fundraising and community relations; they generally perform
these roles ably and willingly. But these are not, as we suggested
earlier, absolutely essential governing duties. Board members are
not uniquely qualified for this work; managers often perform
both functions alongside board members.Why, then, are trustees
not guilty of meddling in these instances? Probably because
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they keep board members busy outside the organization, where
they are far less prone to interfere with the work of managers
and staff. More than a coherent theory about the division of
policy and administration, the rules of board engagement seem
to be rooted in an understandable desire on the part of man-
agement to assure a measure of professional discretion and even
autonomy, and to have trustees marshal resources for the organ-
ization to do what management intends.
Our diagnosis of the problem as purpose makes the situation
look much worse than the more prevalent diagnosis of per-
formance. In our analysis, boards may know what to do, and do
it reasonably well, but in the end they are derailed by the mean-
inglessness of what they do.Worse, it is not that some inciden-
tal parts of the job happen to be tiresome now and then:The
problems of purpose are most acute when the board’s key gov-
erning work is involved.And the option of promoting engage-
ment by giving boards more unofficial work only raises other
problems of purpose.
the challenge of reform
If the problem is purpose, then the diagnosis begs for a new and
improved official job description—one that assigns boards a
more attractive array of tasks and might even inspire new ways
of organizing those tasks into new board structures.This is pre-
cisely what we need to resist.
A task-and-structure approach is fraught with risks. First, a
more appealing set of tasks might lead to busier, even happier
boards, but not necessarily to better governed organizations.
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Not everything a board does or can do is governing. And our
goal should not be busier boards but rather more effective gov-
erning. Second, focusing on board tasks tends to encourage the
microgoverning that has marginalized many boards in the first
place. Tasks are prescribed and performed. So the more easily
board tasks can be specified and the more routinely they can be
performed, the more likely they are to represent a technical,
managerial version of governance.Third, as virtually any work-
place experience confirms, task clarification does not always
promote effectiveness. Can any of us name the job where we
succeeded primarily by focusing diligently on our job descrip-
tion? In fact, is there a better indicator of imminent failure than
the sight of someone studying his job description for guidance?
Creating structures to coordinate board tasks has similar lim-
itations. An organizational chart or, in this case, a board’s com-
mittee structure, does answer important questions about who
has authority over what issues and who has responsibility for
what tasks. But organizational charts hardly ensure effective
work. One might study them to see how organizations hope to
work, but not to see how they actually work, much less how well
they work.
Nevertheless, the task-and-structure approach remains appeal-
ing for understandable reasons. If the answer to board problems
is not in enumerating clearly delineated tasks and building fixed
committee structures around them, then the search for better
boards might force us into very murky territory: relying on
board members’ personal judgment, artistry, or wisdom. If assem-
bling naturally gifted or richly experienced board members is
the only way to improve boards, then our prospects for large-
scale change—with 1.5 million nonprofit organizations currently
in place and more forming every year—soon look bleak.
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But because the task-and-structure approach also offers a
circular logic, it is hard to envision alternatives to it.Together,
task and structure seem like the sum total of governance.They
supply good answers to our most important governing ques-
tions:What is governing? And how does a board do it? In re-
sponse, boards tend to envision governance as the sum of discrete
goal-setting or oversight tasks—hiring and firing, planning,
reviewing, evaluating, and so on—structured as a series of com-
mittees. These tasks and structures explain how to govern, by
which we mean how to use authority to (a) set an organization’s
goals and purposes and (b) ensure the organization’s resources
are deployed efficiently and appropriately. There seems little
need to look beyond task and structure and no clue about where
to start if a board wanted to.
An alternative logic begins to emerge if we ask a different
question. In addition to asking “What is governing?” we can ask
“What is it we’re governing?” In other words, do the types of
governing that boards practice work for the types of organiza-
tions they have? The idea of an organization–governance gap
surfaced when we sought advice on governance problems from
trustees, executives, consultants, and researchers. Some of them
suggested that current board structures might be a bad fit for
today’s nonprofit organizations. To overstate only a little, the
idea that we govern today’s nonprofits with the same model
introduced nearly 400 hundred years ago to govern Harvard
College, their colonial forerunner, troubled these observers.
They cited the emergence of entrepreneurial organizations,
interorganizational alliances, and multicorporate forms (for ex-
ample, nonprofits with subsidiaries), and argued that these new
organizational structures might require new board structures
for governing.
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The nonprofit governance literature has long recognized
another gap—a gap between the demands of an organization at
a particular point in its life cycle on the one hand and the com-
position of and governing approaches of its board on the other.
The board of a young organization, according to this analysis,
faces challenges that boards of older organizations do not, like
establishing the legitimacy of the organization and launching
fundraising efforts to help it survive the first fragile years of a
start-up.These developmental and structural gaps pose an impor-
tant question.What do organizations demand of governing?
In this spirit, we want to explore another potential gap—one
between our mental maps of organizations and the governing
modes we use. While no one refers to a formal theory of the
modern organization to get through the day, we do consult our
own personal theories of organization in order to navigate the
work world.These are the assumptions, beliefs, convictions, and
hypotheses that help us make sense of what happens in the
organizations where we work.These personal theories are like
the “mental maps” that sociologists study to understand people
based on the way they depict their neighborhoods. A good
street map will tell us what we need to know about a neigh-
borhood’s layout, but the mental maps of local residents tell us
what people value in that neighborhood and how they inhabit
it.When residents draw their own maps, we can learn from the
boundaries they choose and the landmarks by which they nav-
igate. Some organize their environment around churches,
others around restaurants. Some place the border of their own
neighborhood and adjacent ones based on demographics, oth-
ers set boundaries based on subway lines.
