Reclaiming the Mission: Steps Nonprofit Leaders Can Take When Governance Fails
By James "Jim" Sartain, PhD, MBA
Introduction
What should nonprofit executives do when board dysfunction is hurting the mission? This question haunts countless nonprofit leaders who find themselves caught between their commitment to organizational purpose and the reality of governance challenges. Whether it's board overreach that stifles operational effectiveness, chronic lack of engagement that leaves critical decisions unmade, or internal politics that consume precious resources, dysfunctional governance poses a serious threat to mission fulfillment.
The scope of this challenge is more widespread than many realize. Research suggests that around 80% of boards of directors around the country were dysfunctional in one way or another (Counts, 2022). Yet despite these sobering statistics, reclaiming healthy governance is possible—but it requires courage, strategic thinking, and a commitment to protecting the mission above all else.
The stakes are high. When governance fails, organizations suffer from decreased donor confidence, operational inefficiencies, staff turnover, and ultimately, reduced impact on the communities they serve (Harris et al., 2024). However, nonprofit executives who understand their role in fostering board effectiveness can implement specific strategies to address dysfunction and restore governance health.
Key Insights
Document and Diagnose: Start with Facts, Not Feelings
The foundation of addressing board dysfunction begins with objective assessment rather than emotional reactions. Effective nonprofit leaders understand that adopting solid organizational policies can help your nonprofit set expectations and avoid a laundry list of problems (Blue Avocado, 2024). This process starts with systematic documentation of problematic behaviors and their measurable impact on organizational performance.
Documentation should focus on specific incidents rather than general impressions. Record instances of board overreach, such as when board members bypass established protocols to directly manage staff or make operational decisions without proper authorization. Note patterns of disengagement, including consistent absence from meetings, failure to review materials in advance, or reluctance to participate in strategic discussions. Track the organizational consequences of these behaviors, such as delayed decision-making, confused staff reporting relationships, or missed opportunities for mission advancement.
This diagnostic phase should also include an honest assessment of governance structures themselves. Micromanaging, rubber stamp, and Balkanized nonprofit boards of directors are more common than not, and turning them into high-functioning governing bodies requires being on the alert for six warning signs (Stanford Social Innovation Review, n.d.). These warning signs include boards that either abdicate their oversight responsibilities or overstep into management territory, creating dysfunction at both ends of the governance spectrum.
Engage Key Allies: Identify Board Members Who Understand Their Role
Not all board dysfunction is uniform across the entire board. Successful nonprofit executives recognize that change often begins with engaging those board members who understand appropriate governance roles and can serve as champions for reform. Board members are the fiduciaries who steer the organization towards a sustainable future by adopting sound, ethical, and legal management policies and ensuring adequate resources (National Council of Nonprofits, n.d.).
Identifying these allies requires careful observation and strategic relationship building. Look for board members who consistently prepare for meetings, ask thoughtful questions about organizational performance rather than operational details, and demonstrate understanding of the distinction between board governance and staff management. These individuals often have previous nonprofit board experience or professional backgrounds that give them insight into effective governance practices.
Once identified, these allies can become powerful partners in governance reform efforts. They can help articulate the case for change to other board members, model appropriate board behavior, and provide support when difficult conversations about dysfunction need to occur. Building this coalition of committed board members creates a foundation for sustainable governance improvement rather than temporary fixes that fade when executive leadership changes.
Propose Solutions: Recommend Board Retreats, Revised Governance Policies, and External Facilitation
With documentation complete and allies identified, nonprofit executives must transition from problem identification to solution implementation. This phase requires presenting concrete, actionable proposals that address the root causes of dysfunction while providing face-saving opportunities for board members to embrace change.
Board retreats offer powerful opportunities for governance renewal. Well-designed retreats can address role clarity, improve board dynamics, and establish new norms for effective governance. These sessions should include education about appropriate board roles and responsibilities, facilitated discussions about organizational priorities, and collaborative development of governance policies that prevent future dysfunction. The retreat format allows for deeper conversations than typical board meetings permit and can help rebuild trust between board and staff.
Revised governance policies provide the structural foundation for improved board performance. Maintain corporate minutes of all board meetings, and for committee meetings of any committees that are authorized to act on behalf of the board, such as an executive committee while implementing annually review a written policy and complete a questionnaire about conflicts of interest (National Council of Nonprofits, n.d.). These policies should clearly delineate board and staff roles, establish decision-making processes, create accountability mechanisms, and provide procedures for addressing performance issues.
External facilitation can be invaluable in governance reform efforts. Experienced consultants bring objectivity to charged situations, provide expertise in governance best practices, and can navigate sensitive dynamics that might be difficult for internal leadership to address. They can also offer credible reinforcement of appropriate governance principles that board members might resist hearing from staff.
Know When to Escalate: If Fiduciary Failures Threaten the Organization
While most governance dysfunction can be addressed through internal reform efforts, nonprofit executives must recognize when escalation becomes necessary to protect the organization and its mission. Fiduciary failures that threaten organizational sustainability or violate legal obligations require more serious intervention.
These situations might include board members who engage in conflicts of interest without proper disclosure, financial irregularities or inadequate oversight of organizational resources, persistent violation of legal requirements or regulatory obligations, or governance decisions that threaten organizational tax-exempt status. When such issues arise, the stakes extend beyond internal dysfunction to potential organizational survival.
Harris et al. (2024) find that improvements in governance are associated with less of a decline in donations following a fraud, highlighting how governance failures can have lasting financial consequences (American Accounting Association, 2024). In these circumstances, nonprofit executives may need to engage legal counsel to understand obligations and options, consult with regulatory bodies when legal violations are suspected, or work with board allies to remove persistently problematic board members through established governance procedures.
The decision to escalate should not be taken lightly, as it can create lasting organizational disruption. However, the alternative—allowing serious fiduciary failures to continue—poses even greater risks to mission fulfillment and organizational sustainability.
The Path Forward: Leadership in Action
Addressing board dysfunction requires nonprofit executives to exercise leadership that extends beyond day-to-day management responsibilities. This leadership involves courage to name problems that others might prefer to ignore, strategic thinking to develop solutions that address root causes rather than symptoms, and persistence to see reform efforts through to completion despite inevitable resistance.
Successful governance reform also requires recognizing that board dysfunction often reflects broader organizational challenges. Weak governance policies, unclear role definitions, inadequate board recruitment processes, and insufficient orientation programs all contribute to dysfunction. Sustainable improvement requires addressing these systemic issues rather than simply managing individual problem behaviors.
The process of reclaiming healthy governance is rarely quick or easy. It's a guide filled with lessons on navigating and restructuring nonprofit leadership, aimed at ensuring that other small nonprofits might avoid or repair similar fractures (Blue Avocado, 2024). Change requires patience, consistent effort, and willingness to weather temporary discomfort for long-term organizational health.
Takeaway
Leadership means protecting the mission—even when that means addressing uncomfortable board dynamics with strength and clarity. Nonprofit executives who wait for governance problems to resolve themselves often find that dysfunction deepens over time, creating increasingly serious threats to organizational effectiveness and mission fulfillment.
The strategies outlined here—systematic documentation, strategic alliance building, concrete solution proposals, and appropriate escalation when necessary—provide a roadmap for nonprofit leaders facing governance challenges. While the path may be difficult, the alternative—allowing dysfunction to persist—ultimately serves neither the organization nor the communities it exists to serve.
Effective nonprofit leadership requires the courage to confront governance dysfunction directly, the wisdom to approach reform strategically, and the persistence to see improvement efforts through to completion. By taking these steps, nonprofit executives can reclaim healthy governance and ensure that their organizations remain focused on mission fulfillment rather than internal dysfunction.
The mission is too important to be held hostage by governance failures. With careful planning, strategic action, and unwavering commitment to organizational purpose, nonprofit leaders can transform dysfunctional boards into powerful partners in creating positive change.
References
American Accounting Association. (2024, December 1). Good governance in not-for-profit organizations: A review of the literature on boards of directors. J
ournal of Governmental & Nonprofit Accounting. https://publications.aaahq.org/jogna/article/13/1/56/12789/Good-Governance-in-Not-for-Profit-Organizations-A
Blue Avocado. (2024, November 12). A cautionary tale: Overcoming governance nightmares in nonprofit organizations. https://blueavocado.org/board-of-directors/governance-nightmares/
Blue Avocado. (2024, October 16). Rebuilding nonprofit boards: When a new board can be a fresh start. https://blueavocado.org/board-of-directors/rebuilding-nonprofit-board/
Counts, A. (2022, July 15). A case study of nonprofit board dysfunction. Alex Counts. https://www.alexcounts.com/blog/2020/9/7/a-case-study-of-nonprofit-board-dysfunction
National Council of Nonprofits. (n.d.). Board roles and responsibilities. https://www.councilofnonprofits.org/running-nonprofit/governance-leadership/board-roles-and-responsibilities
National Council of Nonprofits. (n.d.). Good governance policies for nonprofits. https://www.councilofnonprofits.org/running-nonprofit/governance-leadership/good-governance-policies-nonprofits
Stanford Social Innovation Review. (n.d.). Spotting and fixing dysfunctional nonprofit boards. https://ssir.org/articles/entry/spotting_and_fixing_dysfunctional_nonprofit_boards
