Purpose-driven board leadership (PDBL) is a governance model championed by BoardSource* that embraces four basic principles:

1. Purpose Over Organization – commitment to an organization’s mission, core values, and immutable vision (i.e., the social outcome that is the reason for the organization’s existence) above the outcome that is the best for the organization in isolation
2. Respect for Ecosystem – commitment to decisions and actions that take into account how they may impact the organization’s (a) communities (e.g., service recipients and other beneficiaries, employees, volunteers, donors, allies, adversaries, applicable geographic communities) and (b) ecosystem (including the natural environment in which the organization operates or impacts)
3. Equity Mindset – commitment to advancing equitable outcomes without favoritism built on systemic and historic discrimination, personal self-interested preferences, or doing what has always been done
4. Authorized Voice & Power – commitment to leadership and decision-making based on sufficient representation and engagement with the organization’s key communities served by the organization

* Disclosure: I’m a board member of BoardSource

While the literature on PDBL continues to grow (see the list of references at the end of this post), there has been little discussion on how PDBL can show up in a nonprofit’s organizational documents (e.g., articles of incorporation and bylaws). This area deserves attention as these documents (especially the bylaws) set out the rules for how the organization is governed.

Fiduciary Duties

Board members each owe to their corporations duties of care and loyalty (some governance experts also refer to a duty of obedience which is generally viewed by lawyers as a blend of the other duties). The duty of loyalty requires that board members act in the best interests of the corporation. For charitable nonprofit corporations, the best interests of the corporation must be viewed in light of the corporation’s charitable mission and not just the corporation’s own existence and future sustainability. See, e.g., Restatement of the Law: Duty of Loyalty.

Under PDBL, a charitable nonprofit corporation’s best interests would also require consideration of its values, immutable vision, and ecosystem. This makes intuitive sense even when considering why the nonprofit exists, why it receives support, and how its success is interdependent with the well-being of others in its communities and the physical environment in which the nonprofit and its communities exist. See, e.g., Purpose-Driven Board Leadership and Climate Change.

Sample Bylaws Provisions

For boards that have adopted or are working towards adopting PDBL, incorporating core elements of PDBL in the bylaws can be an illuminating exercise. The following represents just some of the ways PDBL might be reflected in a nonprofit’s bylaws.

Purposes. The purposes of this corporation are charitable within the meaning of Section 501(c)(3) of the Internal Revenue Code. In the context of these general purposes, this corporation shall <describe purposes more specifically>. As an integral part of its specific charitable purpose, this corporation shall respect the following core values: respect for this corporation’s communities and ecosystem, equitable outcomes, community representation in leadership and decision-making, and <list other core values>.

Vision. This corporation exists to ultimately <describe immutable vision>.

Role of the Board. As required by law, the activities and affairs of this corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the Board. In exercising its powers, the Board shall ensure that this corporation’s activities, strategies, and resource allocations are aligned with and advance its charitable purposes, core values, and vision. In addition, the Board shall consider the equitable impact of its decisions on the communities served. The Board shall strive to ensure that its governance practices and decision-making processes are informed by diverse perspectives and are responsive to the needs of the communities this corporation serves. The Board shall periodically assess whether this corporation’s activities are advancing its purposes in a manner that is fair and inclusive and may take reasonable steps to address material disparities.

Adaptive Governance. The Board shall engage in ongoing learning and evaluation to ensure that its governance practices remain effective in advancing this corporation’s purposes and modeling purpose-driven board leadership (PDBL) and the following principles:

(1) purpose, vision, and values over organization
(2) respect for ecosystem
(3) equity mindset
(4) authorized voice and power.

Fiduciary Duties. A director shall perform the duties of a director, including duties as a member of any committee of the board upon which the director may serve, in good faith, in a manner that director believes to be in the best interests of this corporation and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. A director’s good faith belief in what is the best interest of this corporation must be reasonable in light of this corporation’s charitable purposes, core values, and vision.

PDBL Committee. This corporation shall have a PDBL Committee composed of [#] directors and <list others who would be appropriate for service on the PDBL Committee>. The PDBL Committee shall be responsible for reviewing operational alignment with this corporation’s charitable purposes, core values, and vision; building this corporation’s capacity for greater community representation; making recommendations to the Board on matters related to PDBL; and supporting the Board and this corporation’s other committees on matters related to PDBL.

Other Possible Impacts on Bylaws

A board’s embrace of PDBL may lead to other governance changes in practice and in the bylaws. For example:

• the selection of the corporation’s office(s)
• board composition
• the process for the selection of directors
• director term limits
• regular board meeting frequency
• meetings with other persons and groups
• delegations of authority to committees of different types
• officer positions, their respective delegated duties, and the process for the selection of officers
• amendments to the bylaws (including to certain key provisions which might require a different approval process)

Past Posts on PDBL

Purpose-Driven Board Leadership, Legally Speaking

More on Purpose-Driven Board Leadership

NAAG/NASCO Charities Conference: Purpose-Driven Board Leadership

Purpose-Driven Board Leadership and Climate Change

FSG Podcast: Purpose-Driven Board Leadership

Purpose-Driven Board Leadership During Challenging Times

Purpose-Driven Board Leadership: Authorized Voice & Power in Philanthropy

Additional PDBL Resources

Purpose-Driven Board Leadership (BoardSource)

Purpose-Driven Board Leadership: A Conversation Starter for Boards (BoardSource)

Authorized Voice & Power in the Boardroom: Reimagining Governance to Fulfill Philanthropy’s Purpose (BoardSource)

The Four Principles of Purpose-Driven Board Leadership (Anne Wallestad, SSIR)