The role of board skepticism in strengthening nonprofit performance measurement and accountability

Abstract

We interviewed 21 board chairs of nonprofits with social missions to ask how their organizations assess performance when they cannot adequately track the intangible work by employees or the outcomes of this work. We find that the uncertainty around tracking performance data makes boards skeptical of their ability to assess performance in these organizations. Our study suggests that the skepticism of these boards inspires effective strategies focused on decreasing uncertainty around performance. These strategies include tracking a combination of quantified data, process data, and narratives from employees and clients, and ensuring specific board processes that foster a psychologically safe environment for discussion and checking against cognitive biases. We find boards in these organizations to be aware, engaged, and effective at assessing performance and we suggest that policy makers can be better informed by accessing the knowledge and strategy used by these boards.