The Importance of Fostering Solid Governance in an NGO

Nonprofit governance models are the steering wheel that guides the strategies and processes of NGOs and is used by their board of directors to make effective and informed decisions. In the simplest terms, a nonprofit's governance structure combines the policies, guidelines, systems, and procedures that are used to make effective, data-driven decisions. At the same time, they hold their members and teams accountable. I am extremely passionate about these structures because they imply the alignment of the operating framework with the organization’s goals, primarily the vision of the organization, which is what makes the mission a reality. In the case of NMDP México®, that mission is to save lives by advancing the cell therapy ecosystem, removing barriers to stem cell transplants, and being a world-class partner. That is our daily motivator.

Governance models refer to how the organization's guidelines interact smoothly and seamlessly to help achieve the organization's missions and define the framework, including the responsibilities of each person or team in the NGO.  But a key factor to remember is that you cannot compromise on good governance when talking about nonprofits. Although their objectives are focused on supporting social or humanitarian causes, NGOs also face similar challenges to those faced by businesses. Therefore, good governance is essential, not only to govern effectively but to make the organization attractive to volunteer workers, as well as to sponsors, allies, and all the different audiences that have a role in its operation.

Establishing good governance is essential to navigate in a volatile environment, where leaders have a responsibility to take an active role in putting the organization's mission and objectives at the forefront, while also addressing fiduciary issues, social investment challenges and ensuring that everyone is being a good steward of the funds raised to support the mission. I am proud to say that NMDP México’s governance structure is guided by leaders who are strong in their commitment to save lives. Because of their knowledge and dedication, they pave the way in advancing toward our mission while providing guidance to our team. 

Another benefit that I consider to be essential is that solid governance broadens the landscape, attracting competent board members, skilled staff and volunteers who can drive the organization's growth. Board members need to have a broad understanding of the organization's work and be accountable. So, what is the importance of governance in a nonprofit organization? The NGO benefits from individual and collective talents, which is the key to improving performance and achieving results.  

From my position within an NGO that has been in Mexico for more than seven years, I have witnessed how the concept of governance is becoming increasingly important, emerging as a new model of hierarchical control, characterized by a higher degree of cooperation among all actors. This approach is aimed at generating value, maximizing resources, and ensuring that those resources are operated in a transparent way. There is widespread recognition of the importance of good governance of nonprofit organizations and guidance on different effective mechanisms to enhance ethical practices for the entire sector. 

What are the main reasons that inspire nonprofits to implement good governance mechanisms? The term “governance” is closely related to the board of directors because it is associated with the exercise of authority, management, and control, referring to the operational guidelines for interaction between the board and stakeholders. It is a way of achieving a social mission through a set of requirements and conditions to be met and practices to be applied. There is also the concept of self-regulation, which is closely related to good governance. NGOs use self-regulation to strengthen governance systems, as well as to ensure quality, which implies the sector's ability to access, diversify, and attract external funding.

Let’s be honest, when we’re caught up in the day to day of running a nonprofit, governance can seem less like a vital function and more like a task, which is why good governance requires the right mix of board members, a figure that provides leadership and accountability, and that fosters careful discussions, transparent practices, and thoughtful governance policies across the organization.