Board Governance for Continuous Innovation in Nonprofit Organizations

Background:  Innovation is critical for nonprofit organizations’ effective response to changing environmental conditions. While the board of directors, which has the ultimate responsibility for leadership and governance of nonprofit organizations, is in a position to facilitate the development of such capacity, the research on boards and innovation in nonprofit organizations is very limited. The existing studies have focused primarily on the structure of the board and its make-up and how they influence numerous organizational outcomes. Missing from these studies is process explanation of the relationships between the board of directors and organizational innovation (Wu, 2008). The author of this presentation introduces an integrative model of Board Governance for Innovation and provides preliminary empirical evidence for the model from nonprofit organizations in developing countries.

Method: A qualitative study of four highly innovative nonprofit organizations in developing countries (India, Bangladesh, and Egypt) was carried out to gain insights into their board attributes and processes (social capital, board culture, board cohesiveness, board-ED relationship, and board chair-ED relationship, human capital, board diversity, and board size). Those particular organizations were chosen because of their stature as widely recognized innovators in developing countries (case studies discussing continuous innovation in these organizations have been published in scholarly journals). In-depth semi-structured Skype interviews were conducted with five representatives of those innovative organizations. Each of the respondents received an interview guide prior to the interview. The guide included eight open-ended questions pertaining to each major variable in the model. Each interview lasted for an average of one hour. All interviews were recorded and transcribed for subsequent thematic analysis. Additional information pertaining to the boards was obtained from organizations’ websites and existing documents (board meeting minutes, strategic plans, case studies of those organizations).

Results: Participating organizations had boards with rich social and human capital, and strong relationships between the board chair and executive director, as well as board members and executive director. Their boards were medium sized, fairly homogeneous, and had executive directors serving as active board members. The results suggested that the board played important roles during the major processes of innovation. To ensure continuous idea generation and access of external ideas, the board served in the visioning role, helping organizations think about the future and making sure that the organizations did not reach plateau. During the process of interpreting and evaluating ideas, the boards did critical questioning of those ideas – their feasibility, timeliness, and fit with the organization’s mission. During the experimenting and consensus building stage the board approved implementation of those ideas. Finally, during the formalization and routinization stage the board facilitated implementation of those new ideas (through the resource acquisition), and monitored the effectiveness of innovative programs.

Discussion/implications: While limited, this preliminary data provides support for the role of board of directors in the process of innovation, and highlights the importance of board attribute and process variables. Future research should seek to further explore the link between board variables and innovation across larger samples of different types of nonprofit organizations and in different contexts.