Nonprofit Organization Governance

Abstract

Organizational governance has become a popular and important topic in the nonprofit sector literature. This review focuses on the governance of non-membership, paid-staff nonprofit organizations (also called nonprofit agencies), which are characterized by a hierarchical structure, where the board has the ultimate power and the responsibility to ensure that governance functions are carried out. Such agency boards are usually self-perpetuating, unlike the situation in voluntary membership associations, where the members usually elect the board. We contribute to the literature on the governance of nonprofit organizations in three major ways. First, we discuss research themes identified by previous review articles, analyze empirical and conceptual contributions from the recent nonprofit organization governance literature, and identify a number of governance challenges for nonprofit organizations. Second, we present a wide array of theoretical perspectives from different disciplines that may be useful when studying the governance of nonprofit organizations. From a practical viewpoint this is important, as it may assist researchers in the theoretical framing of their papers and help them in the formulation of theory-based hypotheses. Third, we integrate a number of theoretical perspectives by using a paradox perspective. We focus on four important contemporary governance challenges in nonprofit organizations: (1) stakeholder accountability, (2) environmental dependence, (3) volunteer reliability, and (4) board group dynamics. By using a multi-theoretical approach to analyze the ambiguities, paradoxes, and dilemmas associated with these governance challenges, we provide more general theory-based frameworks for the governance of nonprofit organizations than currently available in the literature.

Volunteer Reliability in Nonprofit Organizations: A Theoretical Model

“…Some volunteer managers attempt to overcome these challenges by reducing the responsibilities of volunteers or by asking for more help to ensure that sufficient volunteers turn up (Nichols & Ojala, 2009). A theoretical model explaining why volunteers perform (un)reliably, however, remains missing in the literature (Van Puyvelde, 2016). We belief that such a framework may help volunteer managers to formulate answers to the abovementioned challenge.…”

“…The investigation of volunteer reliability has been hindered due to the lack of a theoretical framework for understanding what drives the behavior of volunteers (Van Puyvelde, 2016).…”

The economics of nonprofit organisations' governance

“…Cornforth (, p. 1129), in his comprehensive overview, points at the most important of these shortcomings: the almost exclusive focus on NPOs' boards (such as in Cornforth, ), ignoring the more intricate multilevel processes within NPOs and between NPOs and their external stakeholders (see also Van Puyvelde, Caers, Du Bois, and Jegers, ). As made clear by the recent literature review by Van Puyvelde (), the extant research on NPOs' governance has been framed within different specific or combined theoretical perspectives contained in numerous research domains (Van Puyvelde, , pp. 20–34) .…”

“…He refers to stakeholder theory, agency theory, stewardship theory, resource dependence theory, institutional theory, managerial hegemony theory, upper echelons theory, organisational commitment theory, psychological contract theory, functional motives theory, shared mental model theory, group relations theory, social construction theory, social capital theory, sociological modernisation theory, negotiated order theory, and nonprofit professionalisation theory, as well as to attempts to integrate a number of them (Van Puyvelde, , p. 37).…”

Legal Accountability and Nonprofit Governance: An Exploratory Quantitative Study of Board Member and Executive Knowledge of Fiduciary Duties

“…Institutional isomorphism draws on classical institutionalism in that it focuses on how organizations respond to their environments in order to gain legitimacy. Coupled with the isomorphic element that identifies how organizational processes or structures increasingly converge, isomorphism explains that as organizations respond to external pressures, rules, norms, and sanctions they become more similar over time (Bromley & Meyer, 2017;Miller-Millesen, 2003;Van Puyvelde, 2016). Therefore, nonprofit organizations behave in a manner that aligns with isomorphism when they adopt procedures, structures, and policies that are used by their colleagues, which provides a certain degree of legitimacy (Miller-Millesen, 2003).…”