Who’s in Charge, in Whose Interest? The Experience of Ownership and Accountability in the Charity Sector

Abstract

Purpose: This paper examines the puzzles of “ownership”, the legal and psychological commitment of directors, through the experience of the work of boards at non-profit organisations. Design/Methodology/Approach: An exploration of the literature on charity governance leads to a first-person reflection on the tensions in directing two common types of non-profit organisations.

Findings: In the UK as in other countries, charities are companies, bound by company law as well as regulatory constraints of the non-profit sector. This creates responsibilities of ownership without the material benefits. In contrast to corporate share ownership, a sense of psychological ownership may pre-date appointment as a director, facilitating stewardship behaviour, facilitating stewardship and accountability.

Research implications: This paper calls for expanded empirical work on boards of non-profit organisations, giving a focused agenda of aspects to highlight the differences between charities and the corporate sector.

Practical implications: The focus on psychological ownership can influence recruitment, induction and organisation of the work of charity boards, helping to ease resource deficits.

Social implications: With pressure mounting in deliver of public services, the charity sector needs to fill growing gaps in provision. The constitution of boards plays a valuable role.

Originality/Value: By incorporating psychological ownership in a framework of accountability, this paper points towards both a research agenda and practical considerations for charity boards.

Keywords: Charity boards, non-profit organisations, directors, trustees, corporate governance

JEL Classification: M1, M14, L21, L31