Why NGOs can have Governance Problems
Not-for-profit organisations often find themselves embroiled in disagreements over what the board should and shouldn't be doing. Some Boards are seen as too 'hands off' by staff, and others as 'micro-managers', scrutinising every small detail of an organisation's operations.Not-for-profit organisations appear to have more governance problems than for-profit organisations because the question of who owns the organisation is complex. In a for-profit situation, the company belongs to the shareholders, or the owner. In a not-for-profit situation, employees feel their commitment to the organisation (often for less pay and more hours) is a kind of ownership. So they feel they have a right to make input to the running of the organisation.
This is complicated by the fact that funding bodies can feel they have ownership rights to the organisation - after all, they're putting up the cash. Clients and customers, in receiving services, may feel they have an ownership role as well.
A further issue is that not-for-profit organisations are often governed by a voluntary board, even if they have paid staff. This may mean that the Board has very little knowledge or experience in organisational governance, and this may lead to disputes over its role. Using voluntary board members, who will usually have their own jobs and life to concentrate upon, may also mean that paid staff have much greater knowledge and understanding of the organisation and board processes, leading tham to "manage up" - or do much of the Board's governance role for them.
To top this off, in non-profits there are often conflicting and emotive attitudes about the core vision and values of the organisation (or its 'soul').
You may find one governance problem is resolved only to be followed by another. In this case, you can be fairly certain the board needs to sit down, consult with staff, and agree on the relative limits of board and staff responsibilities. Remember that, in times of change, the board needs to explain itself more and involve staff more in its decisions.
Back to Boards: Governance Basics
