Governance as Leadership

The significance of the not-for-profit sector (in Canada and world wide), means directors, board members and executive officers need to rethink conventional practice if they are to effectively govern.  That being said, "Effective governance by the board of a nonprofit organization is a rare and unnatural act. Only the most uncommon of nonprofit boards functions as it should by harnessing the collective efforts of accomplished individuals to advance the institution’s mission and long-term welfare" (Chait, Holland, Taylor, 1996).

Not-for-profit organizations operate as foundations, societies, charities, co-operatives and volunteer groups. They rise up from grassroots initiatives or form in response to service, social or economic gaps. 

As a board member, executive officer and advocate for good governance, I support Chait, Ryan & Taylor's (2005) research that it takes great self-awareness for a Board to realize the variety of choices possible for their leadership and decision-making process. However, it is often an internal crisis, forced change or a transformative leader that inspires a board to self-assess and then move from past practice to present need.

Waiting for a crisis or change agent should not be a common or accepted leadership practice of this important sector that employs 2 million people and represents $79.1 billion or 7.8% of Canada's GDP (larger than automotive or manufacturing). A sector or organization driven by purpose, in a climate of increasing demand and limited resources, needs to employ sound governance principles and practice.

Experience and theory affirms that Boards and board members leading with sound governance practice and principles are -

• more engaged,
• more able to understand and respond to the entities purpose and responsibilities,
• more able to make critical, forward thinking decisions that support them and the future of the not-for-profit.

A more engaged, informed and enabled board is better for the people being served, donors, funders, board members, chief executive officers and the employees.

Chait, et al, propose governance as leadership is evidenced and in turn can be developed by how a board addresses their primary responsibilities: fiduciary, strategic and generative leadership. The following framework can be used to guide a board through inquiry, information analysis and informed decision-making with respect to its key functions -

With an understanding of governance as leadership, aspiring and established leaders can ask themselves, their boards and, or board colleagues - 

How effective is our board leadership?

How are we as a board (board member) developing our knowledge, skill and competency?

References:

Chait, Richard, P. Holland, Thomas, Taylor, Barbara (1996). Improving the Performance of Governance Boards. Oryx Press

Chait, Richard P., Ph.D., Ryan, William P., Ph.D., Taylor, Barbara E. 2005. Governance as Leadership: Reframing the Work of Nonprofit Boards. Board Source. www.boardsource.org/Bookstore.asp?Item=161Generally Accepted Practices for Sustainability in Non-Profit Management, CentrePoint Non-Profit Management:2009 www.thecentrepoint.caIndustry Canada. 2002. Primer for Directors for Not-for-Profit Corporations: Rights, Duties & Practices. www.ic.gc.ca/epic/site/cilp-pdci.nsf/en/h_cl00688e.html