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Governance as leadership Reframing the work of noprofit boards - Ñhait R.

Chait R. , Teylor B.E. Governance as leadership Reframing the work of noprofit boards - Wiley publishing , 2005. - 226 p.
ISBN 0-471-68420-1
Download (direct link): governanceasleadership2005.pdf
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The process starts with the selection of trustees.A board cannot accumulate or expend reputational capital through a haphazard approach to recruitment. The organization should ask, “What reputation do we want to advance (or repair) with what stakeholders?” For instance, an organization with a damaged reputation may require different trustees than one with a reputation intact. Or, a low-status organization may need high-status trustees, while a high-status organization may need more worker bees than queen bees.
Nonprofits attuned to the value of a board’s reputation will intentionally make appointments that cultivate a particular reputation with a particular audience. Thus, the board of a New England college appointed several distinguished scholars to underscore to faculty and students the trustees’ commitment to academic quality. The board of a midwestern hospital traditionally includes clergy to convey to patients and physicians an allegiance to the precepts and ethics of the sponsoring order. (In the for-profit sector, various corporations, stained by scandal, have appointed outside directors of unassailable integrity in order to
assure stockholders of the company’s probity.) However adroitly accomplished, inspired appointments add only nominal value; far greater advantage arises when trustees are actively engaged on the organization’s behalf.The relationships between trustee reputation and trustee engagement are illustrated in Exhibit 7.4.
Deadwood add no value; figureheads add token value. In the latter case, nonprofits exploit the “halo effect” as stakeholders transfer to the organization the legitimacy of prominent trustees. (The same principle applies in reverse:When the personal reputations of certain executives were tarnished by corporate misdeeds, many were encouraged or forced to resign from nonprofit boards to spare the organization taint by association.) The organization borrows board members’ status at no cost to the trustees, a passive transaction for both parties. Of course, no-show, luminary trustees can also be a liability, especially when these “celebrities” confess to colleagues and acquain-
exhibit 7.4 brand name vaLue of board members

Trustee Reputation and Name Recognition
Level of Trustee
Engagement High Low
Superstars Worker bees
High Marquee name, Little or no name
leadership role. recognition, much
sweat equity.
Figureheads Deadwood
Low All hat, no horse. No hat, no horse,
Brand equity no value.
without sweat
tances indifference or ignorance about the organization’s purposes and performance.
Some nonprofits ask that trustees lend only a name but never a hand. Over the long run, however, a renowned roster of “nonplayers” records few victories. The rate of return on the board’s reputational capital accelerates with trustee engagement. Therefore, nonprofits customarily seek 100 percent participation by trustees in the capital campaign or annual fund to symbolize the board’s support for the organization and to strengthen the case to other development prospects. At a more advanced level, the worker bees and superstars publicly commend and promote the organization, visibly volunteer, and enthusiastically use the organization’s services. (I have a child enrolled here. I had surgery here. I attended a support group here.)
While helpful, these measures do not leverage the trustees’ reputation. More resourceful and valuable examples include:
• Trustees of a private college contact the parents of the ablest high school seniors offered admission to tout the institution, answer questions, and express a personal interest in the student. Whenever possible, the college matches the trustee’s background to the student’s academic interests.
• At programs for parents of prospective students, trustees— not admissions officers or the headmaster—of an independent school explain the institution’s strengths, values, and benefits, and answer parents’ questions.
• The board of an eminent nonprofit, widely regarded as well-governed, parlayed that feature to “trade up in the applicant pool” for a new CEO.
In all of these cases, the trustees were not just dispatched by management on tactical missions to mend or fortify relation-
ships with a particular constituency. Rather, the board consciously and strategically decided which stakeholders were sufficiently important to the organization’s future to warrant the investment of a valuable resource: the trustees’ reputational capital.
Boards are uniquely situated to generate and expend reputational capital. Trustees have credibility and stature as respected citizens, prestigious professionals, objective overseers, dedicated volunteers, and generous donors. These are truly distinctive attributes and assets, especially when taken together, that are not present anywhere else in the organization, no matter how gifted the executives or staff may be.
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