This study examines how NGO board effectiveness and characteristics influence perceptions of innovation in Nepalese NGOs. Surveys of 225 board members found board effectiveness in resource acquisition and monitoring strongly predicted higher innovation perceptions, aligning with theories on the primacy of oversight. However, strategic involvement, diversity, tenure, and organizational characteristics showed insignificant or negative relationships. The strong positive link between resource oversight and innovation highlights the universal importance of this governance role. However, strategic involvement's insignificance suggests it may play a different role in non‐Western contexts based on cultural perspectives. Longer tenure's negative association indicates longevity can stifle innovation, so turnover may better encourage adaptability. Size only weakly predicted innovation, implying other factors like effectiveness are more impactful. While cross‐sectional, the developing country context provides useful insights on optimizing resource acquisition and monitoring to enable innovation. The findings indicate oversight effectiveness and active governance matter more than structural characteristics for NGO innovation.