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Reimagining Non-Profit Governance

On September 27, 2018, The Mowat Centre released “Peering into the Future:  Reimaging Governance in the Non-Profit Sector”.  This timely report lays out some important thoughts on the current state of governance structures in the non-profit sector, provides some examples of alternative governance models, and lays out some key questions to consider as the sector looks for new governance models that will allow for a new definition of governance to emerge – one that sees governance “as a shared leadership function that expends beyond the board” and one that is “centered on impact and learning, where innovation is prioritized and balanced against risk.

We would highly recommend that anyone in a leadership role in the non-profit sector take a read through the MowatNFP report.  It has certainly sparked some thinking around the Eco-Ethonomics office.  Below we summarize the article, pulling out some of what we believe to be key points.

The report starts with an acknowledgement that governance is hard and that there is no “one size fits all” model and calls out how changes in the non-profit sector are upsetting the balance of current governance models. A central theme of the report is the need to shift from having the board be solely responsible for governance to a more collaborative model where responsibility for governance is shared with the board.

Governance structures are so ingrained it may come as a surprise to some that there are in fact “no statutory requirements in Canada for boards to act as the sole governance entity of a non-profit”.   Boards must provide oversight to ensure the organization is realizing its mission, they must also act in the best interests of the organization.  Boards can delegate many responsibilities as they see fit, however “they have ultimate accountability and liability”.

Many organizations today face capacity and recruitment challenges when looking to fill their board positions.  From navigating changing funding environments, to the need to collaborate and see an individual organization’s impact and role within a broader system of change, to the need to understand technology and data analysis, the report details the many functions boards are currently asked to fill, and the skill sets that they need to do so.  We won’t summarize those points here; the overall point is that serving as a board member for a non-profit organization is an incredibly big and complex job for a volunteer.

The examples that the report highlights from research come from collaborative approaches -and look to consider what aspects of governance work can or should be done by a wider group, beyond the board.  Specifically, the report highlights:

  • Orienting governance towards organizational learning and impact
    • Rise Asset Development introduced a Social Impact Scorecard that has helped to foster deeper organizational insight into opportunities for continuous improvement and scale.
  • Separating fundraising from the board
    • Habitat for Humanity established a National Leadership Council, that asked members to support advocacy and fundraising efforts only leading to record breaking revenue growth for the association.
  • People centred models of governance
    • The Winnipeg Boldness Project does not have a traditional board structure but works through a Stewardship Group (responsible for strategic and financial oversight), a Funders Group, and four Guide Groups (comprised of community members and experts that organize the most promising ideas and identify further research opportunities)
  • Technological advances and their potential for governance transformation – technology can be used to develop participatory models of governance which allow for better stakeholder engagement
  • Engagement organizing and distributed leadership – leverages technology and community organizing practices to engage people at scale
    • Ecology Ottawa engages interested citizens on specific local issues and teams are structured and re-invented based on context, a steering committee focuses on day-to-day operations and the board manages fiduciary duties.
  • Need for funding that supports capacity building, training and new approaches in governance

As the sector looks to new models, the report asks that we keep in mind how philosophical differences and our understanding of impact may influence governance practices, the need to account for cultural considerations, at perhaps most controversially the report raises the question of compensation for non-profit board members (who share the same liabilities as compensated directors in the for-profit sector)

In conclusion the report calls on funders and sector leaders to:

  • convene to reflect on governance, opportunities, challenges and solutions
  • test and iterate new governance models and approaches
  • promote governance through mentorship, leadership training and skills development
  • connect governance initiatives with upcoming policy initiatives (i.e. National Social Innovation and Social Finance Strategy and the Special Senate Committee on the Charitable Sector’s upcoming study).

The full MowatNFP report can be found at https://mowatcentre.ca/wp-content/uploads/publications/171_EE_peering_into_the_future.pdf

A summary of key takeaways can be found at https://mowatcentre.ca/peering-into-the-future-key-takeaways/