Governance Challenges for Not-for-Profit Organisations: Empirical Evidence in Support of A Contingency Approach

ABSTRACT: This article presents evidence of the governance challenges faced by Australian not-for-profit (NFP) organisations. We find a key challenge for NFPs is recruiting individuals with appropriate skills, as directors are volunteers often elected by the membership and frequently lack relevant experience. Another issue is balancing the needs of a diverse constituency with competing demands. We find that the often proposed solution to this challenge – stakeholder representation on boards – can further hinder the recruitment of suitable directors and create tensions detrimental to board effectiveness. We argue to shift focus away from normative governance models towards a contingency approach and posit a role for a national NFP sector regulator in assisting to develop appropriate governance systems according to contextual factors