Improving Nonprofit Board Governance 獅城遊記(鄭老師)

Improving Nonprofit Board Governance

 

The purpose of this dissertation is to demonstrate how to apply Pointer and Orlikoff’s (2002) governance model together with Kemmis and McTaggart’s (1988) action research model to carry out an improvement program for the Board of Directors of a Hong Kong Non-governmental Organization (NGO) that address the need of improving its board members’ governance performance, and to further provide my recommendations, generalized from this study, to nonprofit boards in Hong Kong or other environments to conduct similar development programs to improve their members’ governance performance. The span of the program was three and half years from January 2002 to July 2005.

 

Research Problem and Purposes

The research problem was to design, implement and evaluate an improvement program for the board members of a NGO to improve their governance performance. I was the researcher and a member in the board. This study had both action and research purposes.

1.          The action purpose of this study was to investigate the use of Pointer and Orlikoff’s (2002) governance model in the design, implementation and evaluation of a development program that addressed the needs of improving the governance performance of the Board of Directors of the NGO). This purpose flowed from the practical needs of improving the governance competencies, beliefs and behaviours of the NGO board members that would result in enhancing the organization’s effectiveness to respond and overcome one after another reform tide such as changes in social welfare policy, subvention mode, social service delivery model, and assessments for service quality and outcomes.

2.          By exploring in-depth the process and content of carrying out a development program that addressed the needs of improving the governance performance of the Board of Directors of a Hong Kong NGO, the research purposes of this study were to:

1.        Make a contribution to nonprofit literature in the area of exploring the use of different nonprofit governance models in the design, implementation and evaluation of development programs that addressed the needs of improving the governance performance of Hong Kong NGO and other types of nonprofit boards;

2.          Generate hypotheses and suggestions for further studies relating to the use of different nonprofit governance models and development process in the design, implementation and evaluation of development programs that addressed the needs of improving the governance performance of the nonprofit boards.

 

Research Methodology

The research design of my study comprised two parts. In the first part, I applied Kemmis and McTaggart’s (1988) action research process as a broad framework to design, implement and evaluate the improvement program. The action research process of my study comprised four broad stages: initial reflection stage, diagnosing and planning stage, acting and observing stage, and reflection stage.

 

The second part is data analysis. I applied various data collection methods including diary, email to myself (Sankaran, 1997), memos, observations, interviews, and documents such as anecdotal records, field notes, questionnaires and visual material to collect rigorously data and information; and Dick’s (2002) Ground Theory framework to analyse the data. To address the rigor of my action research study, I applied Lincoln and Guba’s (1985) criteria: credibility, transferability, dependability and confirmability to evaluate the rigor of my research findings.

 Outcome of the Study

The project ended at July 2005. The result showed profound change and improvement in the board members’ governance performance that reported average 66% improvement in all the governance themes of Pointer and Orlikoff’s (2002) governance model and significant improvements in those problematic governance themes that were identified in diagnosing stage.

 Implications from the Study

Twelve recommendations were distilled from the study for nonprofit boards in other environments to carry similar development program to improve their members’ governance performance. These recommendations are the synthesis by linking my hand-on experiences and learning gained from the three and half years’ action research project conducted in the Board of Directors of a Hong Kong NGO in time of social welfare reform, and my review of nonprofit literature.

• Recommendation 1

I recommend the nonprofit board to apply Pointer and Orlikoff’s (2002) governance model to diagnose individual board member’s governance problems or deficiencies, set improvement focus and priority based on the diagnosing result, and assess the changes or improvements of the board members’ governance performance during the process or the end of the improvement program.

•  Recommendation 2

I recommend the nonprofit board to apply Kemmis and McTaggart’s (1988) action research framework as a broad processing framework to design, implement and evaluate the development program. The model is composed of four broad basic activities: initial reflection, plan, action and observation, and reflection.

• Recommendation 3

I recommend the nonprofit board members to adapt transformational leadership style to govern their organizations. This leadership style offers many advantages to a mission-driven organization.

•  Recommendation 4

I recommend engaging all the board members in the improvement program within an agreed time frame.

• Recommendation 5

Building mutual trust among the board members should be a continuous effort throughout the improvement program. I recommend the nonprofit board to hold regular private gatherings for the members that provide a safe and harmony environment for them to express freely and openly their ideas and opinions on how to improve their own governance performance, appreciate and support each other’s efforts.

• Recommendation 6

The overarching obligation of a nonprofit board is to ensure its organization’s resources and capacities that are deployed in ways that benefit its stakeholders.

1.   I recommend the nonprofit board to carefully identify who are the major stakeholders of the organization in new situation.

2.   I recommend the nonprofit board to search the major stakeholders’ opinions and requirements towards the effectiveness of the organization before carrying out the improvement program.

3.   I recommend the nonprofit board to work closely with the CEO to keep track of the changes of interests and expectations of the major stakeholders that helps to discover the patterns of assumptions, values, and norms guiding stakeholders’ actions and the need for changes.

4.  I recommend the nonprofit board to stag in touch with their stakeholders and gain their backing for their decisions by motivating stakeholders to accept its decisions, involving stakeholders in changes initiated by the board, and preventing misunderstandings of the board’s decisions. These activities further engaged the board in an ongoing dialogue with its key stakeholders that may be able to influence their expectations and clarify their perceptions.

• Recommendation 7

Before planning any change intervention, I recommend the nonprofit board to establish or re-establish the management leader role of the CEO in the board and the organization.

1.      The board’s job is governing and not managing. I recommend the nonprofit board to hold the CEO to be their only direct report.

2.      I recommend the nonprofit board to search relevant nonprofit literature to construct its own set of policies that define recruitment, training, assessment and compensation for the CEO.

3.      I recommend the nonprofit board to apply Balanced Scorecard (BSC) system to assess the CEO’s and also the staff’s executive performance.

•  Recommendation 8

I recommend the nonprofit board to formulate new mission for the organization. The formulation steps are:

1.          The board reviews the validity of the existing mission to assess whether it can provide reasons for change and guide the board to construct new development direction in current external and internal environments.

2.          Reformulation of organization mission may trigger unexpected conflict and risk in the organization. The board should consider different perceptions of how much risk the board would take and precede the reformulation process carefully and deliberately.

3.          The board should consult their major stakeholders’ opinions in the formulation process of new organization mission. 

4.          New organization mission should be formally approved by the board. 

5.          Once the new mission is formulated, the board must act like a “missionary” to promote the new mission to the stakeholders and organizational members and monitor the incorporation of new mission into organizational members’ everyday organizational activities.

 

• Recommendation 9

I recommend the nonprofit board to install Balanced Scorecard (BSC) system in its organization, which works as the management and appraisal system for the organization and a useful mechanism for monitoring and evaluating the effectiveness of the change interventions in the improvement program.

 

• Recommendation 10

Mission is meaningless if without action. Once the new mission is formulated, I recommend the nonprofit board to coordinate with the CEO to set organizational goals and develop strategic plans to fulfil the mission.

 

• Recommendation 11

I recommend the nonprofit board to build a board manual that includes all the resources necessary to work as an effective board member.

 

• Recommendation 12

The greatest problem for nonprofit board governance is good people trapped in bad systems. To avoid this, I recommend the nonprofit board to follow my recommendations below to build effective infrastructure to improve the effectiveness and efficiency of the utility of the board’s most valuable and scarcest assets – individual member’s attention, time, and effort.