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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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Furthermore, as we noted in Chapter 6, board members engaged in generative governance straddle the boundary between the organization and the larger environment. In other words, trustees operate exactly where reputations are forged. As with other competitive enterprises, the winners take advantage of location, while the also-rans do not. Trustees restricted to the boardroom and isolated from the intersections of influence contribute little or no reputational capital to fuel the organization’s success. So life at the organization’s boundaries promises at least two advantages: more grist for generative governance and more reputational capital for the institution.
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All organizations, nonprofits no less than for-profits, are political systems where people, individually or in groups, attempt to acquire and retain control over various resources in order to pursue certain interests. In the process, conflicts arise, coalitions form, participants jockey for power, negotiations occur, compromises emerge, and decisions happen. Political capital con-
WORKING CAPITAL THAT MAKES GOVERNANCE WORK
notes, in shorthand, the influence and leverage that people within an organization acquire and deploy to frame problems, to elevate one above others, and to promote one solution over another.
Despite noble missions, nonprofits are hardly above organizational politics. First, nonprofits are particularly pluralistic institutions with diverse parties, inside and outside the organization, that passionately pursue multiple, and often contradictory, goals. Without the common bond of a profit motive, interest groups arise, coalesce, and dissolve contingent on the issues under consideration. Second, nonprofits are not as hierarchical as corporations; most have an innate aversion to formal authority. Compared to business executives, nonprofit managers have noticeably less power. Not many can issue decrees, and far fewer can expect that any mandates will, in fact, be heeded. The autonomy of professionals (for example, physicians, musicians, professors, curators) neutralizes, or even trumps, the authority of management. Finally, participants vie over where and how decisions will be reached. Because process matters as much or more than substance, no one can easily assert the right to make a decision; authority and legitimacy are not one and the same.
To go a step further, we postulate that the political capital of the board matters most in the generative mode, where the consequences for the institution and the potential for conflict are both high.Therefore, a substantial expenditure of political capital will be necessary to encourage and prod the organization to confront generative questions many constituents would prefer to ignore. Questions of core values (Type III) will generally precipitate more intense discussion and dispute than questions of core competencies (Type II) or core budgets (Type I). Proposed departures from tradition (for example, the elimination of fra-
152 GOVERNANCE AS LEADERSHIP
ternities at a college, obstetrics at a hospital, or free admission at a museum) will almost certainly incite more ambivalence and disagreement than proposed departures from the operating budget or even the strategic plan. Granted, boards may have to expend political capital to nudge management to tackle fiduciary issues like deferred maintenance or inefficient energy systems, and strategic topics like targets of opportunity and competitive responses. On the whole, however, boards should carefully conserve political capital that can, when necessary, be judiciously deployed to frame, accentuate, and confront generative issues.
Nonprofit boards accumulate political capital principally in two ways. First, the potential to exert influence emerges from the trustees’ eloquence, intelligence, expertise, prestige, and charisma. These are all means to have sway. In this sense, the board “buys” political capital through the recruitment of powerful trustees. Second, an openness to influence spawns influence and creates reciprocity of power. The board accumulates political capital when trustees are demonstrably susceptible to influence, for example, at executive sessions with the CEO, lunches with senior managers, open forums with clients, multiconstituency task forces with professional staff, focus groups with patrons, or attendance at organizational events. In this sense, the board “makes” political capital through the interplay of influence. Make or buy, the trustees’political capital enhances and balances the distribution of power available to the organization.
Traditionally, nonprofit executives harness the political capital of boards when constituents inside the organization want trustees to influence events and advocate positions outside the organization. Alert to the value of friends in high places, management may marshal the political capital of a well-connected
WORKING CAPITAL THAT MAKES GOVERNANCE WORK 153
board to lobby local or state government; to encourage favorable treatment from the media; to seek special considerations from the community or from corporations; or to persuade skeptical patrons, alumni, or donors that a controversial proposal or decision deserves support.These are the ordinary, and almost invariably fiduciary or strategic, external applications of the trustees’ political capital.
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