III. Meso-theories: paid-staff conventional associations

In this section we discuss the paid-staff association, which is a special form of nonprofit organization that has natural persons or organizational representatives as members, uses the associational form of organization, and relies on both volunteers and paid staff to reach organizational goals (Smith 2010b). However, the theoretical literature on structures and processes in this type of associations is most limited, compared with that on general nonprofit organizations (meaning nonprofit agencies) and voluntary associations. The main goal of this sub-section is therefore to identify the key governance issues, tensions, structures, and processes in paid-staff associations. For a detailed discussion of internal structures and processes in all association types and a multi-theoretical approach to associational governance, including the governance of paid-staff associations and association leadership, see Handbook Chapters 35 and 36.

By reviewing some main theoretical perspectives on corporate governance and discussing how they can be usefully extended to analyze association governance, Cornforth (2004) identifies three governance tensions that boards of membership associations face. First, tension exists between representative and expert boards. Should board members act as representatives for particular membership groups or as experts that use their professional expertise and skills to improve the performance of the association? Second, tension arises over conformance and performance board roles. Whereas the conformance role accentuates the importance of monitoring associational performance and being accountable to external stakeholders, the performance role emphasizes the importance of board involvement in the association’s strategy and top management decisions. Since these roles require board members to behave in different ways, how much attention should boards of associations pay to these contrasting roles?

Moreover, is it possible to combine these roles without experiencing difficulties or compromising one of them? Third, there is also a tension between monitoring and controlling managers, on the one hand, and acting as a partner to them and supporting them, on the other hand. For example, if control is excessive, intrinsic motivation may be crowded out. Too little control, however, may increased opportunism. Since boards of associations may experience pressure to simultaneously control and coach their managers, to what extent should they perform each function to improve associational performance?

Although association board members are typically elected from within the membership, boards of associations are not without means to mitigate the aforementioned governance tensions (Cornforth 2004:21-26). In sum, boards can

(1) improve the board’s competency by improving the quality of training and support available to both current and potential board members, and by using co-options to fill gaps in skills and experience among current board members,

(2) focus their attention on important board processes, such as the way in which longer-term issues are given priority on the board’s agenda, and

(3) regularly review their relationships with the management of the association by discussing and negotiating roles and responsibilities and by analyzing how well they are working together to improve the performance of the association. As such, governance issues related to board composition, board roles, and internal structures and processes in paid-staff associations may at least be partially resolved.

Spear (2004), in contrast, investigates member influence and managerial power in membership associations. First, in examining the extent of member influence over the board, he considers five issues: (1) proportion of users/consumers with member rights, (2) member participation, (3) effects of association size and age on member participation, (4) coalition formation among members, and (5) board functioning. Second, in exploring managerial power in membership associations, he analyzes a number of internal factors (reward structures, information systems, and monitoring), and a number of external factors (market for corporate control, legislation and regulatory frameworks protecting members’ interests, and the professionalization of the managerial labor market) that influence associational governance. In sum, he finds that low member participation, lack of coalition formation, and insufficient board control result in weak member control. This situation is exacerbated by the absence of an external market for corporate control and weak legislation for protecting member rights, although the latter may vary from country to country. Consequently, he argues that (a) there are serious questions about the extent to which board members of paid-staff associations may be considered representative, and that (b) the managers of paid-staff associations may have more power than their counterparts in similar-sized private sector organizations. To improve this situation, a number of countervailing measures are provided that reduce managerial power and develop good board practices in nonprofit associations. These include (1) regulation or voluntary self-regulation to improve governance standards, (2) improving the board’s competency through increased member participation and training of board members, and (3) using effective incentive structures for managers (Spear 2004:54-55).