Leadership by the nonprofit board and management

Styles of leadership

Leadership styles are sometimes labelled in contrasting pairs —

  • task-oriented vs relations-oriented;
  • directive vs participative;
  • autocratic vs democratic;
  • active vs passive.

Or in terms of actions which may suit different contexts —

  • ‘engaging’ leadership;
  • ‘involving’ leadership;
  • ‘goal-oriented’ leadership.

In recent years many researchers have conceptualised leadership as either transformational or transactional

However leadership is styled, the nature of the relationship between leaders and followers is vitally important to its effect. And leadership is vitally important to your whole organisation.

Leadership in nonprofit organisations has an additional, very complex dimension — a social purpose which is fundamental to the overall mission.

This is so whether your organisation is a community service organisation, a charity, a professional association or a sports club. And while the driving force is not profit, nonprofit organisations may be forced to adopt quasi-business models of practice.

A good leader can steer your organisation through apparently conflicting pathways and maintain personal as well as organisational commitment to the social or moral foundation at the heart of your business.

Leadership in your organisation

Complex organisations have leaders at different levels and in different capacities. Less complex organisations may appear to have only one leader. Depending on the size of your organisation there may be an executive team comprised of leaders of various capacities from witin your organisation. Or there may be one paid manager at the head of paid staff and volunteers. But most nonprofits must also have a board or management committee.

The chief executive or top manager will have the most significant executive leadership role – driving the operational side of your organisation towards achieving its goals.

The board is also charged with a leadership role – it is what the board’s authority is based on. The board is responsible for leading good governance. Then too, although the board is a team of equals, the team is ‘led’ by the chair or president.

No organisation can cope with too many leaders – this results in confusion, fracturing of commitment and stagnation. Instead there has to be partnership between the staff leadership (the chief executive or top manager), and the governance leadership (the board or management committee).

How are all these leadership roles reconciled?
A particular area in which problems can occur is the distinction between the board’s or chair’s leadership role and the CEO’s leadership role. This can be particularly difficult in nonprofit organisations because there is ambiguity about the different roles. The following points help to avoid conflict:

  • Both board members and managers should understand the basis of good governance practice
  • There should be a clear delineation of roles between board and management
  • Position descriptions for board members, chair and top managers should be formalised.
  • Both board and management should understanding each other’s role and area of operation
  • Board and management should respect each other’s knowledge, skills and expertise
  • There should be cooperation and trust between senior management and the board, particularly between the chief executive and the chair
  • There must be good, honest and open communication
  • Procedures should be formalised, including documentation and communication

Theories of leadership

Leadership is sometimes discussed in terms of contrasting styles, for example, task-oriented vs relations-oriented; directive vs participative; autocratic vs democratic; active vs passive.

Some researchers have identified different styles of leadership which may suit different contexts. For example:

  • ‘engaging’ leadership is concerned with facilitating others to develop their capabilities and could be very useful when radical change is needed;
  • ‘involving’ leadership is focused on providing a strong sense of direction, while also involving others in setting direction and determining goals – this may benefit organisations in transition;
  • ‘goal-oriented’ leadership is most leader-centric: the leader sets direction and plays the most significant role in directing others to achieve, which may be best for delivering results in a reasonably stable environment.

(This categorisation of leadership styles was the basis of research reported in: V Dulewicz and M Higgs (2005), “Assessing leadership styles and organisational context”, Journal of Managerial Psychology, Vol.20(1/2), pp.105-123.)

Many researchers have conceptualised leadership as either transformational or transactional.(1)

Transformational leadership is sometimes likened to charismatic, inspirational or visionary leadership (although many argue they are different). On the face of it, these leaders appear to be most suited to nonprofit organisations which are generally mission-driven. But this is not always so – it may depend on the stage of the organisation’s lilfecycle.

Transformational leaders are able to inspire followers to commit themselves emotionally to the leader’s vision and to do more than originally expected of them. These leaders can transmit an image of the future and mobilise support for it. Followers are stimulated intellectually and motivated to act in a way that goes beyond self-interest, or expectation of a reward – instead, identifying with the shared vision inspired by the leader.

“Transformational leaders broaden and elevate the interests of followers, generate awareness and acceptance among the followers of the purposes and mission of the group and motivate followers to go beyond their self-interests for the good of the group.”

By their ability to inspire commitment and belief in an envisioned future, transformational leaders can have an influence on entire organisations:

“By defining the need for change, creating new visions, mobilizing commitment to these visions, leaders can ultimately transform the organization.”

This type of leader could be enormously beneficial to an organisation going through major change or crisis.

Transactional leadership is sometimes likened to a cost-benefit exchange process – relations between leaders and followers are based on implicit bargains or exchanges.

The transaction entails followers receiving outcomes they value (for example, wages, prestige, personal satisfaction) in return for acting according to their leader’s wishes or plans. Good leaders provide motivation, direction and satisfaction through their behaviour — and this compensates followers for any deficiencies, for example in their jobs, their remuneration, their roles.

In a stable environment, this sense of motivation, satisfaction and direction maintains commitment among workers or team members. But it could also be useful in times of change, the sense of reward overcoming inevitable reluctance or resistance to change.

Clearly, however leadership is described or classified, a leader’s relationships with “followers” is vitally important to his or her effectiveness – which then affects the whole organisation.

(1) For a summary of these types of leadership: D N Den Hartog, J J Van Muijen, P Koopman (1997), ‘Transactional versus transformational leadership: An analysis of the MLQ’, Journal of Occupational and Organizational Psychology Vol.70, pp.19-34 at p 20.