Nonprofit board turnover and financial performance: Examining optimal board turnover rate in United Way organizations

Abstract

This article examines the effects of board turnover on nonprofit financial performance: resource acquisition and utilization. Governing board members play key roles in connecting organizations with external environments and ensuring that executives properly manage the organizations to achieve organizational missions. They also help in effectively attracting and appropriately utilizing financial resources. Given the importance of governing board members, any turnover occurring in the board should affect nonprofit financial performance. Using insights from organizational theories, we argue that the relationship between board turnover and the ability of UW organizations to acquire and utilize funds is nonlinear (first positive and then negative). We find general support for the hypothesis, which yields implications for both research and practice of board governance and human resources management in the nonprofit sector.

Nonprofit good governance mechanisms: A systematic literature review

“…The remaining 52.94% of the articles (9/17) framed within nonprofit “board relationships” are presented below. The research explores different relationships between nonprofit boards and chair leadership, meeting practices and group dynamics (Van Puyvelde et al, 2018), board turnover and financial performance (An, 2021), chief executive officers (Buse et al, 2016), executive directors (Jäger & Rehli, 2012), advisory boards (Saidel, 1998), and staff (Bradshaw, 2002; Reid & Turbide, 2012). In addition, a theoretical framework to understand relationships among individuals involved in the governance processes of NPOs (Willems et al, 2017), as well as a model to illustrate the balance relationship between leadership and management for boards when NPOs face different crisis stages (McMullin & Raggo, 2020), is developed in this research subline.…”

Understanding nonprofit leader engagement and turnover: A story of job demands and resources

“…Seeking a larger sample size should also provide future research the chance to explore how organizational characteristics, like the level of professionalism, budgetary authority, and structural elements (e.g., chain of command) may shape experiences. Research on nonprofit groups can often benefit from researching multiple locations within a single nonprofit (e.g., United Way; An, 2021), but the current research sampled from across many different types of organizations with broad ranges of mission and characteristics. A more robust sample could begin to allow for quantitative identification of important group characteristics in determining executive experiences, for better and worse.…”

Optimal Turnover Rates and Performance in Public Organizations: Theoretical Expectations

“…Previous studies on this topic generally regard turnover as a disruptive event that negatively affects the organizational performance. While several studies find that the effect of turnover may not simply be negative An 2021;Meier and Hicklin 2008;Moon 2017;Wynen et. al.…”