Academic journal article The Innovation Journal

Board Governance in the Nonprofit Sector: Role-Performance Relationships of Directors

Academic journal article The Innovation Journal

Board Governance in the Nonprofit Sector: Role-Performance Relationships of Directors

Article excerpt

Introduction

In recent decades there has been a growing understanding of the importance of the causal relationship between good governance and the ability of all types of organizations in the not-forprofit, for-profit and governmental sectors to optimize organizational performance. At the same time there has also been a growing understanding that to achieve and sustain good governance, organizations should devote greater attention to many issues and options related to various facets of governance and management from the apex to the base of organizations. At least three general facets of governance and management have been profiled extensively both in the extant literature and in organizational development initiatives as warranting special attention in achieving and sustaining good governance. The first facet has been producing appropriate organizational structures. The second facet has been achieving appropriate alignments of roles between key agents within organizations in relation to various governance, management and operational functions. The third facet has been ensuring various agents within organizations understand and perform their respective roles effectively, ethically, and legally not only in relation to each other, but also in relation to various external stakeholders as defined in a subsequent section of this article. This is not simply about role alignment in terms of what roles are assigned to and performed by various members within organizations, but also the 'role-performance relationships' among them in terms of the ways they actually perform those roles and how effectively they do so in relation to one another and various external stakeholders regardless of precisely how they roles are aligned. By roles we mean "...both the tasks and interdependencies (both relational and structural) subsequent to the tasks" (Sluss et al., 2011: 5055).

This article focuses primarily on the third facet of board governance, with a special emphasis on the role-performance relationships of directors. More specifically, this article focuses primarily on how directors, individually and collectively, actually perform their roles and how they should consider performing those roles within the scope of their governance functions vis-à-vis each other, their chief executives, and various external stakeholders. The operative words in the previous sentence are how directors 'should consider performing their roles', rather than must perform their roles. This is an important distinction for two reasons. First, we do not subscribe to the notion that there is only 'one right way' for governance roles to be aligned or performed by all boards, in all organizations, in all cases, and under all circumstances; instead, we subscribe the contingency perspective related to such matters. Second, because invariably all aspects of governance including how any agents perform their respective roles, involve mindfulness in making strategic choices that in most, if not all, cases emerge out of discussions and negotiations (Leduc and Block, 1985; Block, 1998; Block, n.d.).

Theoretical Perspective and Central Argument

In discussing the role-performance relationships in board governance, this article draws upon role theory in the organizational behaviour literature (Sluss et al., 2011), which postulates that organizations embody networks of relationships between various individuals and groups within and outside organizations who often have intertwining, overlapping or shared roles. More specifically, it draws on those aspects of role theory in that literature that focus attention on role alignments, role conceptualizations, and role-performance expectations. These aspects of role theory are cogently articulated by one author as follows: "Role theory as it relates to organizational leadership is about how the leaders and followers...define their own roles, define the roles of others, how people act in their roles and how people expect people to act in their roles within the organization" (Lorette, n. …

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