Good nonprofit governance requires that an organization be accountable to multiple parties. While this may seem benign and obvious, it can be challenging and more complicated than first appears. Different philosophies of governance can result in different organizational emphasis.
Agency and stewardship theory have a foundation in what Tony Watson called the "systems-control" approach. This relies on a top-down structure that assumes that the organization will benefit from decisions made by senior leaders.
However, other governance theories, such as stakeholder theory and democratic theory, suggest that organizations can benefit from synthesizing multiple groups, priorities, and moral frameworks. Organizations with a social-change mission may find these approaches useful, but they also have their limits.
Case studies of organizations which have used different approaches to governance are informative and enlightening. Read the Entire Article
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Ganesh Natarajan is the Founder and Chairman of 5FWorld, a new platform for funding and developing start-ups, social enterprises and the skills eco-system in India. In the past two decades, he has built two of India’s high-growth software services companies – Aptech and Zensar – almost from scratch to global success.