Bringing Business Expertise to the Governance of Non Profit Organisations

Abstract

The focus of this paper is on organisations which do not have the aim of securing and distributing profits to their stakeholders. These organisations are often called ‘associations’, or ‘voluntary organisations’ or ‘not-for- profit’ or non profit (or even nonprofit) organisations or, in the UK, charities. The descriptor used in this paper is ‘non profit’, but these different names are used interchangeably in this paper, as a deliberate reflection of the lack of unanimity on exactly what these organisations should be called. The particular focus of this paper is an examination of the impact of business expertise on the governance of ‘non profit’ or ‘voluntary’ organisations. The governance of these organisations is a highly topical and contentious issue. There is increasing evidence of a convergence between for profit and not for profit organisations in the adoption and use of management practices (Tamburrini, 2009; Ramirez and Janiga, 2009). Landsberg (2004) has expressed the view that a disproportionate business influence on charities may undermine their fundamental ethos and missions. However, it has also been suggested that business expertise can make significant enhancements to the effectiveness of non profit organisations (Bradley, Jansen and Silverman, 2003). In this paper, we address this issue by exploring the impact of business members on the boards of charities. The specific charitable organisations which we examine in this chapter are those which operate in the arts, science and cultural fields in Scotland.