According to a recently released report, boards of directors function in a way that is similar to psychologist Abraham Maslow’s hierarchy of needs.
Abraham Maslow proposed that human needs form a hierarchy. As each level of need is fulfilled, the next level of unmet need becomes predominant.
So what does this have to do with nonprofit boards? The management consulting firm McKinsey & Company surveyed more than 770 directors from public and private companies and from nonprofit organizations. One purpose of the survey was to identify characteristics that successful boards share. The survey found that more than one in four of the directors felt their board’s impact was moderate or low.
“It appears that boards progress through a hierarchy of practices that’s analogous to Maslow’s hierarchy of needs,” the McKinsey report observed. Some boards function at a low level and undertake only “the basics” of ensuring compliance, reviewing financial reports, and so on. However, those boards that have a higher impact perform a variety of additional activities as well.
What activities beyond the basics do high-impact boards perform? According to the report, they may include:
- forward-looking strategic planning
- evaluating resource allocation
- seeking ways to remove biases from decisions
- debating the board’s own decision-making processes
The entire McKinsey report can be found here.
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