The Board Of Directors: A Theory-Based Approach

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The Board of Directors play a key role in the success or failure of any organization. Although boards differ tremendously, even in how they select their member (i.e. elected, self-perpetuating, appointed, or hybrid), there are two details that remain consistent: the board is “both held responsible and called to account for the organization” (Howe, 2002, p. 30). This essay will discuss the functional responsibilities of the Board of Directors and conclude with a brief description of the three theories highlighted in the article Understanding the Behavior of Nonprofit Boards of Directors: A Theory-Based Approach by Judith L. Miller-Millesen.
Define the Functional Responsibilities of the Board of Directors In his textbook, Nonprofit Management: …show more content…
The three theories are agency, resource dependence, and institutional; each theory has a different focus. For instance, agency theory protects the organization by keeping ownership and control separated. As a matter of fact, Miller-Millesen explains that boards with members who have no additional internal positions tend to have greater ties with the community. Within the agency theory, the board is responsible to protect the organization from conflicts of interest and ensure that the organization remains committed to their mission and engages in activities consistent with the expectations of the community. On the other hand, resource dependence theory basically assumes that the board will reduce organizational uncertainty, assures the organization remains adaptive, protects the organization from environmental interferences, and represents the organization to external communities. Whereas, institutional theory states that the board has a responsibility to attend meetings, adhere to all local, state, and federal laws, ensure that all administrative tasks are completed and on time, maintain sound financial practices, and avoid conflict of interest situations (Miller-Millesen, 2003). These three theories are more comprehensive and detailed than this essay allows for; however, the information conveyed was to provide the reader with a …show more content…
Two of the three servants invested the talents they were given and the investment prospered; however, one of the servants did nothing with his talents but instead buried it. Therefore, it doesn’t matter which theory the Board of Directors adhere to, what is important is that they take care of what they have been entrusted with and seek to make it prosper. Of course, what is deemed prosperous for each organization will vary depending on their mission and
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