BOARDS OF DIRECTORS AND
The first lesson to be learned is that nonprofits need a clear and functioning governance structure. They have to take their governance seriously and they have to work hard on it. … Making the organs of governance effective in the nonprofit institution and creating the proper relationship between them should therefore be considered a priority task of executive officers.
—Drucker (1990a:8, 13)
The nonprofit board has always been important, but greater national attention is being focused on its role than ever before. This scrutiny has been precipitated by escalating demands for the services that nonprofits provide, intense competition for funds from private and public sources to finance those services, and growing recognition that the success of nonprofit organizations in delivering services will be influenced by the effectiveness of their leaders. … It is the board which is ultimately responsible for ensuring that the organization fulfills its mission.
IN EVERY formal organization, there is a component that has the fundamental responsibility for defining the institutional relationship of the organization to its environment—that is, for establishing the “policy framework.” In nearly all formal organizations, the official policy-making component is a group of individuals. In nonprofit human service organizations, including both voluntary nonprofit and quasi-governmental nonprofit, this policy-making group is identified as a board of directors (reflecting a tradition taken over from the business world), or a board of trustees (taken from the concept of a trust or charitable foundation) (Siciliano and Spiro 1992). The board of directors is the formal, legal embodiment of the service organization and its mission. Collectively, the board members are in positions of trust with fiduciary responsibility for the organization (Siciliano and Spiro 1992). And it is the board of directors that provides legal continuity of the organization over time, regardless of changes in the membership of the board.