PERCEIVED BEHAVIOR OF FOR-PROFIT CORPORATE DIRECTORS WHEN SERVING ON BOARDS OF DIRECTORS OF U.S. NOT-FOR-PROFIT INSTITUTIONS (NONPROFIT, UNITED STATES)
The purpose of this dissertation is to study the perceived behavior of directors of for-profit corporations as they perform as directors of not-for-profit organizations. Do they perceive their own behavior and that of their peers to be the same or different in the two different environments? If different, how and why? And, what do they think should be done about it?
Although distinguished individuals in academia, the for-profit and not-for-profit worlds have speculated that behavioral differences exist, this is the first time it has been documented.
The study is also significant because of the importance of preserving not-for-profit institutions in the U.S., which is the only country in which so many services are provided by private individuals volunteering time and money to these organizations. Faced with serious problems for survival--let alone growth--many not-for-profits have elected for-profit directors to their boards to utilize their business experience.
A sample of 75 senior business executives of major corporations was randomly selected from the volunteers recruited by the National Executive Service Corps.
Data was obtained by mail questionnaires, personal and telephone interviews during August-November, 1984.
Results indicated definite behavioral differences in: (1) Attendance; (2) preparation; (3) participation; (4) performance. Reasons given: (1) selection; (2) indoctrination; (3) behavior of chairman and other directors; (4) size and structure of board; (5) lack of external "policing" factors; (6) attitude/motivation.
For-profit directors are motivated by the pocketbook; not-for-profit directors by psychic rewards.
Although not-for-profits claim to select for-profit directors for their "brains", they are not utilizing them properly and are more interested in their financial contributions--direct or indirect. Consequently, many are not motivated to perform the same way on not-for-profit boards as on for-profit boards.
Respondents' suggestions for improving the situation are also reported.