Nonprofit Organization Governance (A Theoretical Review)

Organizational governance has become a popular and important topic in third-sector research. This review focuses on the governance of paid-staff nonprofit organizations (also called nonprofit agencies), which are characterized by a hierarchical structure where the board has the power and the responsibility to ensure that governance functions are carried out. In this review, Van Puyvelde discusses previous literature on nonprofit organization governance. Next, a wide array of theoretical perspectives are presented that may be useful when studying the governance of nonprofit organizations. In order to analyze a number of important contemporary governance challenges, some of these theories are integrated by using a paradox perspective. The underlying idea is that depending upon the governance challenge under consideration, a different combination of theoretical perspectives may be required. Van Puyvelde concludes that different theoretical frameworks can co-exist in the literature, each addressing a different issue in nonprofit governance.