In their classic nonprofit book, “Governance as Leadership,” Dick Chait, Bill Ryan, and Barbara Taylor identify 3 modes of effective board governance. When taken together, these 3 modes are designed to ensure that board members have meaningful experiences and that the corporate body of the board fulfills its important governance role for the nonprofit.
These governance modes are:
- Fiduciary – in this mode, the board oversees operations and ensures efficient and appropriate use of resources, legal compliance, and fiscal accountability.
- Strategic – in this mode, the board sets organizational priorities, reviews and modifies strategic plans, and monitors performance against those plans.
- Generative – in this mode, the board is the “sense maker” for the nonprofit. It decides what to decide, discerns challenges and opportunities, and probes the assumptions, logic and values behind the strategies.
All governing boards should spend time in each of these modes.
In general, though, Chait, Ryan, and Taylor suggest that most boards spend the bulk of their time in the Fiduciary Mode, some boards elevate occasionally to the Strategic Mode, and far too few boards ever work in the Generative Mode. They argue, however, that when boards spend at least some of their time consistently in the Generative Mode, board member meaning and enthusiasm increases and positive organizational impact is experienced. A board that regularly works in the Generative Mode is what is meant by “governance as leadership.”
Our firm would agree.
Far too few nonprofit boards work beyond their fiduciary and strategic responsibilities. Indeed, for many boards, working in the Generative Mode simply doesn’t happen.
But, we would suggest something is missing. We would add an additional mode of governance for boards to consider.
This fourth mode of governance is the Advancement Mode.
Much like the Generative Mode, Gonser GerberLLP finds that the Advancement Mode of governance is an opportunity missed for both enhancing board member satisfaction as well as increasing institutional results.
In the Advancement Mode, the board collaboratively assists nonprofit administrators in planned activities designed to gather the needed resources in support of the institution’s mission and vision. In this mode of governance, the board asks itself, “how can we actively enhance the advancement outcomes of this organization?”
In the Advancement Mode, board members are active. They are working in partnership with the institution’s administrative leaders and staff. They are animating their care for the mission. They are doing something that helps.
Think, for instance, of a board member introducing a potential new donor to an institutional leader. Or, a board member hosting an event at their home. Or, a board member joining the development director on a visit with a donor to invite a significant charitable gift. Or, a board member speaking at an event about the importance of supporting the recently announced campaign.
Of course, the fiduciary, strategic, and generative modes matter tremendously in nonprofit governance effectiveness. But, these modes – as important as they are – only engage board members intellectually (and, perhaps, emotionally). There is no outlet for more direct, kinetic, and personalized member involvement.
The Advancement Mode of governance is the vehicle for this outlet. Thoughtfully providing board members with partnership opportunities to actively advance the mission and vision adds a dimension of board member engagement that extends and enhances the other three governance modes.
Most people agree to serve on nonprofit boards because they believe deeply in the importance of the mission and because they personally want to help advance that mission.
Yes, governance is leadership.
And leadership should actively help the institution advance.
This article was originally posted in the Gonser Gerber E-Bulletin – March 2024 Edition
