To make the case they start by describing eight sources of inconsistent (read ‘poor’) governance.

1. Non-profit directors often lack a shared understanding of what good governance means

Too many directors have only a partial sense of the commitments they have accepted. Non-profit board orientation programmes, if held at all, are often created and driven by staff members. These programmes introduce a new director to the organisation but seldom include a director-driven discussion of the board’s role, governance responsibilities, and how the board organises itself to fulfil its responsibilities. This deficiency is compounded by a lack of continuing director education.

2. Non-profit boards do not always have the right voices in the boardroom

Too many boards prioritise financial capacity and personal networks (i.e., the ability to give, or get funds for the organisation) at the expense of community representation, relevant professional skills, and other governance-relevant attributes.

3. Pressure to help organisations meet annual fundraising targets shifts attention away from governance

Many board members believe, therefore, that fundraising is as, or more, important than their other obligations as directors. Fundraising obligations pull board attention from other governance responsibilities and encourage boards to become larger at the cost of reduced ability for the board to conduct its primary functions effectively.[2]

4. Boards fail to regularly assess governance performance and develop improvement plans

Unsurprisingly, the evidence shows that boards that regularly self-assess perform better against key governance responsibilities than boards that do not.

5. Poor governance processes push boards to underinvest on critical issues and governance activities

Inefficient meetings, poor facilitation and unwieldy agendas pull time from critical topics. Board committees are often unfocused and lack accountability. A bias towards consensus too often leads to rubberstamp decisions. Inadequate board meeting materials and tight timelines mean boards struggle to debate complex issues and explore strategic choices. In addition, the lack of accurate performance indicators mean boards are uncertain about the actual performance of their organisation and whether they are providing well-informed direction.

6. A low-accountability board culture leads to inconsistent effort by individual directors

In not-for-profit organisations voluntary board work often takes a backseat to directors’ day jobs, frequently leading to inadequate preparation for participation in board meetings and decision-making. A weak board culture may be reflected in a preference for being ‘nice’ at the expense of failing to hold underperforming directors accountable for the quality of their engagement. Even if there is board self-assessment, directors are rarely asked to evaluate the performance of their colleagues.

7. Confusion between the board’s role and that of management

When they are passionate volunteers, directors can overstep boundaries and get too involved in the day-to-day activities of the organisation. This frustrates managers and diverts time from deliberation on matters of governance relevance and significance. Understanding the board’s roles and responsibilities is fundamental to its performance.

8. Governance has become tougher

The world is changing in ways that expose weak governance practices, multiplying the risks facing the finances and reputation of not-for-profits. For example: increasing financial complexity; technological development that creates new opportunities but brings increased risk; sociocultural shifts that require rethinking assumptions and greater attention to diversity and inclusion; increased exposure to regulatory and public scrutiny; and increasing legal obligations.

Defining the CGO role

Jansen and Hatch suggest the answer to these shortcomings is to have a chief governance officer who is “…an internal governance quality advocate who helps the board comprehensively engage with its governance obligations”. They propose two key areas of oversight for the CGO:

Ensure compliance with legal and social expectations. The CGO should ask questions to ensure the board and organisation comply with current and emerging legal and ethical standards to preserve the organisation’s licence to operate in the community. Further, the CGO should help the board anticipate rather than merely react to changes in its operating environment

Champion the adoption of proven governance practices that enable the board to help the organisation fulfil its mission effectively and efficiently. The authors rightly point out that CGOs cannot deliver high-quality governance on their own. Such an appointment counts for little unless complemented by a board commitment to adopting practices to support organisational performance and fulfilment of its core purpose. In other words, the CGO needs a definite mandate.

The essence of the proposed role appears to lie in asking questions that prompt board reflection and action. The authors also contend the CGO should play a direct role in addressing the previously referred to sources of inconsistent governance. For example, by:

• leading a bi-annual review of governance effectiveness and monitoring initiatives to improve board performance
• driving new director governance training and shaping supplemental training and education over time
• monitoring external governance-related developments on behalf the board
• engaging with the chief executive on how staff can best support high-quality governance
• working with the board chair and the chief executive to define committee mandates and develop an annual board work plan
• participating in the director nominating process to improve the emphasis on recruiting for skill and diversity.

Identifying the CGO

Given this analysis, the authors ask: “Who is best suited to serve as this good governance catalyst?” They rightly propose that skill set, and mindset are the critical drivers in selecting someone to fill the CGO role. “An independent, objective, organisation first mindset and willingness to ask hard, sometimes uncomfortable questions is essential to this role.” They contend it is also essential that the CGO is a member of the board rather than an external advisor.

Realistically, this is not a case of ‘one size fits all’; how each board assigns this role should be a localised decision. Jansen and Hatch do briefly analyse a range of options, referring to a mix of individual positions and board committee options: board chair, board deputy chair, independent director, governance committee and executive committee.

We have long contended that the board chair, by definition, is the CGO. However, one of our team has recently been in a similar role and has experienced how a chair and separate CGO can be a highly effective combination provided the CGO complements and does not compete with the chair. The chair, after all, is the person the board has selected to lead the board.

Implementing the CGO role

Finally, the authors offer some thoughts about successful implementation of the role. Among those we consider these the most important:

• recruit the skill set. To get and retain the right candidate, acknowledge there will be a meaningful commitment outside board meetings and be prepared to waive other board expectations (e.g., fundraising and committee appointments)
• make the position an officer of the board to ensure the CGO role is seen as a real leadership role
• have the CGO report (i.e., be accountable) to the board as a whole.

This article was pitched at not-for-profit boards and strongly flavoured by US experience and practice. However, the board shortcomings described as creating the need for this role are universal. It is not only applicable to other jurisdictions but valuable in a business context. Similar shortcomings exist there and the penalties for ineffective governance are even greater.

[1] Paul Jansen and Helen Hatch. ‘Does Your Nonprofit Board Need a CGO?’ Stanford Social Innovation Review, March 21, 2022.

[2] US governance expert John Carver, who first coined the term ‘CGO,’ thoroughly debunked the idea that fundraising is a primary responsibility of not-for-profit board (see John Carver (1997) Board Members As Fundraisers, Advisers, and Lobbyists. San Francisco, Jossey-Bass Publishers)