Who Governs a Nonprofit, Really?

Summary

The theory is that the board of directors governs an organization. In practice, charity boards face greater challenges than commercial boards in ensuring organizational performance, proper board selection and good power dynamics.

In addition, there is one fundamental difference: the definition of owner within the charity context should go beyond the legal owner – to include the volunteers, donors and the community it purports to serve.

In satisfying this public interest aspect of charities, two additional levels of active governance should be applied: regulation and the court of public opinion. And in some places around the world, these two additional levels have risen to the fore.