When it comes to any nonprofit organization or NGO, the board stands in the position of Chief Steward of the organization and the Executive Director (ED) as Under-Steward, having been given the fiduciary position of trust by God, the community at large, and the stakeholders. And yet with the emphasis in nonprofit circles on the board’s position as “trustee” with fiduciary responsibilities, there are some that operate under the assumption that they are the “owners” of the organization.
A board, board member, or ED may come to this belief because they view themselves at the top of the chain of command, and thus must act like owners. Alternatively, a board member or ED may honestly believe that the best way to fulfill his or her role is to at least “act like an owner.”
In my research with nonprofit EDs and board members, I found a surprising percentage of individuals who volunteered this philosophy of board membership. They were proud of the fact that they had come to this realization on their own as the best way to define their role as board members or executives: “If I act like an owner and manage the resources of the organization accordingly, I will take better care of them than if I assumed the resources belonged to someone else. After all, don’t we take care of our own things better than the things of others?”
There are a number of reasons why “acting like an owner” is misleading, if not dangerous to the future of stewardship and the nonprofit world. In the world of agency theory, this way of thinking might be helpful. But in the altruistic world of the steward, higher values are in play that are connected with managing non-owned resources. This way of thinking also carries with it a dangerous slippery slope in which “acting like an owner” today can easily morph into “being the owner” tomorrow. I might take better care of resources that I consider my own, but they are still my resources, and I generally assume that I have complete freedom to do what I want with my own resources.
Finally, there is nothing to compel a board member or ED that is “acting like an owner” to develop any relationship with the stakeholders. If organizational resources are treated as if they are my own, then why would I need or want to consult with others concerning the goals and objectives for those resources? I become the final arbitrator of resource decisions because there is no need to consult with anyone else. A board that believes that they are the final owner or arbitrator of the nonprofit resources will either ignore or minimize their relationship with the stakeholders, viewing them at best as just a convenient funding channel, or at worst, a burden.
Therefore, a nonprofit board and ED need to be crystal clear about their role as stewards of the organization. They are not owners but hold in trust that which God and the stakeholders have placed into their responsibility. They must resist any move, however slight, towards acting like owners or dismissing the importance of their relationship with the true owners of the organization: God, stakeholders, and the community.
Kent Wilson (PhD) is a leadership coach and nonprofit leadership specialist. After running nonprofit organizations for 30 years, he now serves as an executive coach with Vistage International in Colorado Springs, the CLA program director for Leader2Leader, co-founder of the Steward Leader Initiative, and frequently trains boards in steward-governance.
Learn more and sharpen your Board Governance effectiveness by attending The Outcomes Conference, CLA Dallas 2015. Here is a preview of what Christian Leadership Alliance (CLA) has planned for you! Register now and take advantage of early savings.
- Workshop Session 1 Wednesday, April 15 8:00 AM – 9:30 AM
- Maggie Bailey, Ph.D., Vice Provost for Program Development and Accreditation Liaison Officer Point Loma Nazarene University
- Caryn Ryan, Managing Member Misionwell, LLC
- Samuel Wolgemuth, President Emeritus and past Board Chair World Relief
- John Van Drunen, Vice President
- Dan Busby, President ECFA
- Tom Okarma, Founder Vantage Point