The Origins of Governance

June 1, 2010

Linda Crompton, President and CEO, BoardSource

The other day I was part of a conversation with a board about the relevance of the governance movement.  They were curious as to how and why a focus on governance developed and why it is now considered so important.  A perfect set of questions for BoardSource!

When this organization was formed 22 years ago, many people thought governance was strictly a political term.  It took several years for the current interpretation of the word, originally derived from the Greek term meaning “to steer,” to come into common usage and then develop into its own field of study.  Two decades later the field has grown to include research and consulting firms, individual trainers, publishers, and journals, each with their own lens on governance practices.  Now that the spotlight is on the nonprofit sector, especially when a major debacle is in the news, everyone is quick to ask, “Where were the directors?”, forgetting that just a short while ago, the question would have been “Who ARE the directors?” as they were at that stage, essentially invisible actors.

Far from being a “fad” that many thought would disappear quickly from the headlines, governance has gone beyond just being a buzzword and is now seen as a key component to the effective running of a nonprofit.   As a consequence, boards of today bear almost no resemblance to those of 20 years ago.  Instead of performing a largely titular function, boards are now expected to represent the differing perspectives of various stakeholders; to understand the meaning of fiduciary responsibility and have a degree of financial and legal literacy; to be well versed in the responsibilities of a board member and committed to ongoing education, among other things. To be a board member of a nonprofit today is a complex, demanding, and time-consuming role, and few of these positions are remunerated.

Governance has indeed come of age, and we owe a big thank you to the committed, generous individuals who have taken on this work, because they are critical to the future success of our organizations.

Advertisements

One Response to “The Origins of Governance”

  1. Stuart Emslie Says:

    Let’s not forget the origins of [corporate] governance, which historically lie in the separation between ownership and control. In commercial organisations shareholders (owners) elect boards of directors to represent their (i.e. owners’) interests. Governance is, therefore, a function of ownership. It’s no different in the nonprofit sector, although I do find that some people have genuine difficulty getting their heads around this concept.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: