Good Governance in Not-for-Profit Organizations: A Review of the Literature on Boards of Directors

We review factors that contribute to good governance in not-for-profit (NFP) organizations, specifically the performance and effectiveness of Boards of Directors. Assessing Board performance is a difficult task because of the variety of missions that NFPs strive to achieve and the assortment of stakeholders that they aim to appease. It is further complicated by the limited amount of data that are available and relevant to NFP Boards. Researchers often control for good governance by using an organization’s self-reported information about basic policies and procedures as a proxy for performance, but assessing a Board directly often involves more nuanced information. This review provides background information about NFP Boards, discusses relevant governance theories and the related Board roles commonly examined in NFP research, examines what is known about the performance and effectiveness of Boards in those roles, and suggests ideas for future NFP Board governance research.