Corporate Governance and Social Impact of Non‐Profits: Evidence from a Randomized Program in Healthcare in the Democratic Republic of Congo

45 Pages Posted: 23 Oct 2019 Last revised: 2 Nov 2019

See all articles by Anicet Fangwa

Anicet Fangwa

HEC PARIS

Caroline Flammer

Boston University

Marieke Huysentruyt

HEC Paris

Bertrand V. Quelin

HEC Paris - Strategy & Business Policy

Date Written: October 14, 2019

Abstract

How can non-profit organizations improve their governance to increase their social impact? This study examines the effectiveness of a bundle of governance mechanisms (consisting of pro-social incentives and auditing) in the context of a randomized governance program conducted in the Democratic Republic of Congo’s healthcare sector. Within the program, a set of health centers were randomly assigned to a governance treatment while others were not. We find that improved governance leads to i) higher operating efficiency and ii) improvements in social performance (measured by a reduction in the occurrence of stillbirths and neonatal deaths). Furthermore, we find that funding is not a substitute for governance — health centers that only receive funding increase their scale, but do not show improvements in operating efficiency nor social performance. Overall, our results suggest that corporate governance plays an important role in achieving the non-profits’ objectives and increasing the social impact of the funds invested.

Keywords: corporate governance, non-profit organizations, social impact, healthcare, Sustainable Development Goals (SDGs), developing countries, randomized experiment

JEL Classification: O, Q01, A1, D1, D2, D6, D8, F63, G3, I1

Suggested Citation

Fangwa, Anicet and Flammer, Caroline and Huysentruyt, Marieke and Quélin, Bertrand V., Corporate Governance and Social Impact of Non‐Profits: Evidence from a Randomized Program in Healthcare in the Democratic Republic of Congo (October 14, 2019). HEC Paris Research Paper No. SPE-2019-1354. Available at SSRN: https://ssrn.com/abstract=3469543 or http://dx.doi.org/10.2139/ssrn.3469543

Anicet Fangwa

HEC PARIS ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex
France

Caroline Flammer (Contact Author)

Boston University ( email )

Boston University Questrom School of Business
595 Commonwealth Avenue, Office 634A
Boston, MA 02215
United States

HOME PAGE: http://sites.bu.edu/cflammer/

Marieke Huysentruyt

HEC Paris ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

Bertrand V. Quélin

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

HOME PAGE: http://www.hec.fr/quelin

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