Wednesday, January 27, 2010
Klaus J. Hopt (Max Planck Institute of Foreign Private and Private International Law; European Corporate Governance Institute) has posted The Board of Nonprofit Organizations: Some Corporate Governance Thoughts from Europe on SSRN. Here is the abstract:
Nonprofit organizations have been called the 'neglected stepchildren of modern organization law.' Deficits of control in nonprofit organizations are widespread. This is due to the absence of shareholders who could monitor and of the discipline by takeover markets. This article focuses on the board of nonprofit organizations as the center of nonprofit governance and tries to see what an be learned from the corporate governance discussion. The differences between the United States and Europe as to the board of nonprofit organizations is discussed at the outset. Then the organization and functioning of the board of nonprofit organizations and board responsibility are analyzed. Key problems of organization and functioning are the board structure (one-tier/two-tier), composition and size, committees, remuneration and audit. As to responsibility the duties of the board and its liability must be distinguished. At the end much can be learned from the corporate governance movement, but everything depends on enforcement, legal or non-legal.