Three stages of nonprofit boards

Boards must rise to the challenges of their changing enterprise and changing world. One framework describes the archetypes along the way.

“…everything should be as simple as it can be, but not simpler!”
Composer Roger Sessions paraphrasing Albert Einstein

The study of control systems led W. Ross Ashby to his “Law of Requisite Variety,” which (essentially) states that any regulating system must have an internal variety that is equal to or greater than the system being regulated. In other words, a control system needs a repertory of solutions that matches or exceeds the problems it seeks to solve.

So, as any system gets larger and more complex, the approaches we take to understand and manage that system have to grow in complexity too.

Take, for example, the nonprofit governing board. In the early stages of a start-up nonprofit, these boards are often small groups of friends or community members, rallying around a founding leader or a common purpose. They are generally “hands on” (aka “working boards”) since there is little to no staff, and many/most of the resources are gathered or generated by the friends and their immediate networks.

As that nonprofit grows in size, scope, and complexity, the informal, hands-on, sleeves-up board feels the strain of the rising workload. There’s more fundraising, policy making, compliance, stewardship, and financial consequence in play. And often there’s newly hired professional staff, requiring new and different kinds of relationships within the board, and with staff and constituents. The “variety” of problems outpaces the variety of perspectives and approaches available to address them.

More “variety” in governance comes not only from adding more and different perspectives to the board (beyond friends and family), but also from “training up” toward a greater repertory of ways to make sense and take action together.

In a 1990s paper for the National Center for Nonprofit Boards (now BoardSource), Karl Mathiasen III described three archetypes for nonprofit boards that resonate with the Law of Requisite Variety. Mathiasen called them “stages,” although not every board necessarily moves through all three (and many are fine not moving at all):

• Organizing/Founding Boards are small, homogenous, informal boards that come in two main modes:

  • Following - composed of the trusted peers, friends, or family of a founding leader, this board has a strong and often unquestioning commitment to the leader's vision. They don't do much fundraising. And they will take on tasks if asked by the leader, but won’t tend to initiate tasks themselves.

  • Leading - composed of determined individuals who share a passionate commitment to a purpose, often having founded the enterprise as a group. They bring a strong sense of ownership, and will initiate and take on almost any task that helps the effort move forward.

• Governing Boards have shifted from cheerleading (following) and hands-on tasks (leading) toward governance of the organization and responsibility for its larger well-being and longevity. This includes planning, policy development, financial oversight, fundraising, and a more defined and balanced relationship with the leading executive or professional staff. The transition from Organizing/Founding Boards to Governing Boards can be bumpy both for the individuals involved and for the collective, as it requires new and different relationships and it invites new and different people to the conversation. For following boards, this transition often begins the first time they say “no” to the founding director. For leading boards, it often begins when the founding members become overwhelmed by the workload, but still get hands-on entangled with the professionals they’ve hired to hand it to.

• Institutional Boards are the (usually) large, prestigious, wealthy or wealth-adjacent boards we often associate with large-scale nonprofits. They still focus on planning and policy, but mostly through formal committees, with a dominant focus on fundraising. Because these boards are often quite large, a small subset of members constitute an executive committee that advances the more granular work of the board between full meetings. The vast majority of operational authority is assigned to paid professional executives (CEO, president, executive director, managing director, or sometimes a shared leadership structure). Only a small percentage of nonprofits ever move to this stage. Those that do, tend to find it to be a smoother transition than the earlier move from Organizing/Founding to Governing.

Mathiasen’s stages were informed by his own decades of board service, management counseling, and organizational analysis in the nonprofit world. He did not intend them to be clinical and precise descriptions for any governing board. But he saw them as recurring themes and threads, especially among boards in the midst of organizational or environmental shifts.

Ashby famously wrote that “only variety absorbs variety.” That means that boards facing a continually changing world have to continually change themselves.

Andrew

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SOURCES:
Mathiasen III, Karl. “Board Passages: Three Key Stages in a Nonprofit Board’s Life Cycle.” National Center for Nonprofit Boards, c1990. Summary available here (pdf).

Sessions, Roger. “How a ‘Difficult’ Composer Gets That Way.” New York Times, January 8, 1950.

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From the ArtsManaged Field Guide

Function of the Week: Governance
Governance involves structuring, sustaining, and overseeing the organization’s purposes, resources, and goals (often through boards or trustees).

Framework of the Week: Three Stages of Nonprofit Boards
Karl Mathiasen III described three archetypes of governing boards in the nonprofit world – Organizing/Founding, Governing, and Institutional – as well as the bumpy paths between them.