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The role of boards in the financial vulnerability of nonprofit organizations
Author(s) -
GarciaRodriguez Inigo,
RomeroMerino M. Elena,
SantamariaMariscal Marcos
Publication year - 2021
Publication title -
financial accountability and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.661
H-Index - 44
eISSN - 1468-0408
pISSN - 0267-4424
DOI - 10.1111/faam.12269
Subject(s) - vulnerability (computing) , business , accounting , dual (grammatical number) , on board , public relations , finance , political science , art , computer security , literature , computer science , engineering , aerospace engineering
Prior literature on nonprofit organizations (NPOs) has focused on the effect of board composition on organizational efficiency. However, this research is focused on presenting an analysis of the relationship between the financial vulnerability of NPOs and their boards. Although studies of for‐profit organizations have confirmed this relationship both theoretically and empirically, it is a novel one in the literature regarding nonprofit entities. We apply a multitheoretical approach to explain the dual role of the board (providing both advice and monitoring operations) and a multidimensional model of financial vulnerability. To this end, we use an original hand‐collected database of 64 NPOs from Spain and 800 board members. Contrary to our expectations, our results do not support the existence of a significant relationship between board composition (in terms of board structure and directors’ experience and education) and the financial vulnerability of NPOs.