By Michael Davidson

In leading board workshops I have found it helpful to ask participants to look at the question of why we have boards by comparing not for profit boards with the boards of for-profit corporations.

If the for-profit board exists to provide oversight and strategic advice to protect the interests of the shareholders, who are the stakeholders whose interest the not for profit board should be protecting?

The stakeholder interests that the board of a not-for-profit should be considering are clearly much more diverse than the for-profit stakeholders and include:
• Clients
• The community
• The public interest in the social change
• Government
• Corporate supporters
• Foundation funders
• Individual contributors
• The organization
• Staff

There are never easy solutions for making decisions that respect all of these usually conflicting interests.

How, for example, should the organization:

• Collect data to demonstrate impact when the staff is over-burdened with client meeting client needs?

• Expand to new program space when to do so might impact on other community needs for that space?

• Eliminate unsustainable programs when some supporters have strong attachments to them?

• Adjust programs to a changing community?

How can the board of a not for profit enable itself to make decisions that take into consideration the interests and perspectives of these diverse stakeholders?

The challenge is not resolved by having representatives of each of these interests on the board. This may help but do they really “represent” the various communities with which they are nominally identified?

For me the answer is obvious. Board members must all spend time obtaining direct knowledge of the various stakeholder interests and concerns.

As stated succinctly by Ryan, Chait and Taylor,

“How can a board develop strategy without direct contact with the operational realities…?”

“How can a board evaluate the performance of an organization without some direct knowledge of the enterprise?”

Problem Boards or Board Problem. Nonprofit Quarterly, Governance Issue

Or, as stated even more strongly by Ruth McCambridge, the Editor of the Non Profit Quarterly,

“It has always struck me as next-to-insane to bring people onto a board when they have no significant experience with the work of the organization.”

Board Stories Involving Humans. Nonprofit Quarterly, Governance Issue

In the same way that it is an essential part of the job of the Executive Director and the Board Chair to spend time getting to know the interests, strengths and capacities of the members of the board, the members of the board must spend time learning about the constituencies they serve.

Being out in the community talking about the organization is as much a part of the job as attending board meetings.

Michael Davidson, is a consultant specializing in nonprofit board development. He is the former Chair of Governance Matters and lead consultant for the BoardServe NYC program of the United Way of New York City.