By John Pearson

While this is not a “Governance for Dummies” book—just turn to page 13 and the classic four-quadrant chart delivers an insightful summary on four governance scenarios. Just read that page and you’ve got the big picture.

Book #8: The Practitioner's Guide to Governance as Leadership: Building High-Performing Nonprofit Boards, by Cathy A. Trower (Order from Amazon)

Governance as Leadership: Reframing the Work of Nonprofit Boards, by Richard P. Chait, William P. Ryan, and Barbara E. Taylor (Order from Amazon)

Note: The Practitioner's Guide to Governance as Leadership (2013) is a deep dive into the 2005 book, Governance as Leadership. I’d suggest you read one, but not both.

The books describe four basic scenarios for nonprofit boards and three types of governance.

“Governance by Fiat” is the first scenario. That’s when trustees displace executives. Here the board does staff work. Sometimes the staff is incompetent so the board jumps in. Often the board enjoys staff work. Either way, it’s dysfunctional.

“Governance by Default” is the second scenario. Here both the trustees and the nonprofit executives disengage. No one has their eye on the governance ball—and the important work of governance is minimized. Left undone, it’s a train wreck waiting to happen.

“Leadership as Governance” sounds good, but it’s cockeyed. Here the nonprofit staff displaces the trustees. The CEO and/or senior team make decisions that should be in the governance arena. This happens frequently with founder-led organizations and “good old boy” boards. Often, the organization appears to be operating smoothly. Internally, this dysfunction never ends well. Sooner or later, someone will pay.

The fourth scenario is the healthy one, what the authors call “Type III Governance.”Here the trustees and executives collaborate. Each understands their appropriate roles, but unlike most boards, the staff affirms the board members when they upgrade to “generative thinking.”

So what’s “generative thinking?” The authors use a variety of definitions to explain this cognitive process of excelling boards: sense-making, reflective practice, framing organizations, personal knowledge, etc. I liked “sensible foolishness” the best.

Generative thinking goes beyond “fiduciary governance” (Type I) and beyond “strategic governance” (Type II). This “Type III” approach typically involves three steps: 1) Noticing cues and clues: different people can take the same data and arrive at different meanings; 2) Choosing and using frames: understanding the “fuzzy front end” of a product development process, for example; and 3) Thinking retrospectively: the counter-intuitive high value of “dwelling on the past” to understand patterns that might impact the future.

“Generative thinking is essential to governing,” the authors note. “As long as governing means what most people think it means—setting the goals and direction of an organization and holding management accountable for progress toward these goals—then generative thinking has to be essential to governing. Generative thinking is where goal-setting and direction-setting originate. The contributions boards make to mission-setting, strategy development, and problem-solving certainly shape organizations. But it is cues and frames, along with retrospective thinking, that enable the sense-making on which these other processes depend.”

Yikes! Think about this final zinger from the authors: “And a closer examination of nonprofits suggests something else: Although generative work is essential to governing, boards do very little of it.”

BOARD DISCUSSION: The author's comment, “in their ‘day jobs’ as managers, professionals, or leaders of organizations, trustees routinely rely on generative thinking, so much so they have no need to name it or analyze it. They just do it. But in the boardroom, trustees are at a double disadvantage. Most boards do not routinely practice generative thinking.” They add, “When it comes to generative governing, most trustees add too little, too late.” Do you agree?

MORE RESOURCES: Check out the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom, by Dan Busby and John Pearson, including Lesson 38, “Great Boards Delegate Their Reading.”