LDR 4190 Module 2 Written Assignment: The Board, the Director and Governance as Leadership Example

Beyond Approving the Budget: Governance as Leadership at a Regional Food Bank

Student Name

Bachelor of Science in Organizational Leadership, Thomas Edison State University

LDR-4190: Nonprofit Leadership

Mentor Name

Month Day, Year

Beyond Approving the Budget: Governance as Leadership at a Regional Food Bank

The Board Today

Mercer Harvest's 15-member board meets six times a year. Meetings follow the same pattern: approval of minutes, a financial report, committee reports and an update from the executive director. The board approved the budget, reviewed the audit and the Form 990 and has never missed a filing. But when demand rose 30 percent last year, the board's only response was to approve an emergency appeal the director had already planned. No board meeting discussed whether the food bank should change what it does. Most members were recruited for their professional skills in accounting, law and banking, which suits oversight, and few have experience in food policy or community organizing, which the strategic questions would require.

Legal Duties

Nonprofit board members carry three fiduciary duties, set out in Renz (2016) and the wider governance literature: the duty of care, to act with the attention a reasonably prudent person would use, including reading materials and asking questions; the duty of loyalty, to place the nonprofit's interests above any personal gain and manage conflicts of interest; and the duty of obedience, to see that the organization stays true to its stated purpose and within the law. Mercer Harvest's board meets these duties formally. It has a conflict-of-interest policy, reviews the audit and keeps the organization within its mission.

Board and Director

Research on boards describes the relationship between board and executive director as central to nonprofit leadership. Miller-Millesen (2003) reviewed theories of board behavior, including agency theory, which sees the board as monitoring the director, and resource dependence theory, which sees the board as connecting the organization to resources it needs. Mercer Harvest's board acts almost entirely as a monitor. Few members help raise money or open doors to grocery chains, funders or county officials, although several have the connections to do so.

Governance as Leadership

Chait et al. (2005) argue that boards work in three modes. In the fiduciary mode, the board oversees resources and compliance. In the strategic mode, it works with management on priorities and plans. In the generative mode, it helps frame problems and make sense of ambiguous situations, asking what questions the organization should be asking. Most boards stay in the fiduciary mode, which is necessary but not sufficient. Mercer Harvest's board is an example: excellent at oversight, absent from strategy and silent on the generative question raised by rising demand, whether a food bank alone can end hunger in the county or should also address its causes.

Proposed Changes

First, the board should devote one meeting a year to strategy, with the director presenting options rather than a finished plan, and include a generative discussion of the mission in light of rising demand. Second, it should adopt a consent agenda for routine approvals, freeing time at every meeting for one strategic question. Third, each board member should commit to one resource connection a year, such as introducing the director to a funder or arranging a corporate food drive, with the governance committee tracking these commitments.

Personal Reflection

I serve as a volunteer shift leader at a food pantry that receives food from a bank like Mercer Harvest. From that position I see the effects of governance decisions without seeing the decisions. This module showed me that the most consequential board decisions are often the questions a board never asks.

Conclusion

Mercer Harvest's board meets its legal duties but leads very little. Adding strategic and generative work, and asking members to connect the food bank to resources, would make the board a partner in leadership rather than only a monitor.

References

Chait, R. P., Ryan, W. P., & Taylor, B. E. (2005). Governance as leadership: Reframing the work of nonprofit boards. Wiley.

Miller-Millesen, J. L. (2003). Understanding the behavior of nonprofit boards of directors: A theory-based approach. Nonprofit and Voluntary Sector Quarterly, 32(4), 521-547. https://doi.org/10.1177/0899764003257463

Renz, D. O., & Associates (Eds.). (2016). The Jossey-Bass handbook of nonprofit leadership and management (4th ed.). Wiley.