Voluntas (2018) 29:1098–1111
https://doi.org/10.1007/s11266-017-9945-y
ORIGINAL PAPER
Board Attributes and Processes, Board Effectiveness,
and Organizational Innovation: Evidence from Nonprofit
Organizations
Kristina Jaskyte1
Published online: 16 January 2018
Ó International Society for Third-Sector Research and The Johns Hopkins University 2018
Abstract The purpose of this study was to explore the
relationship between boards of directors and innovation in
nonprofit organizations. The results showed that not only
board attribute variables and board process variables were
directly related to innovation, but they also had a potential
to affect innovation and capacity for innovation indi-
rectly—through board effectiveness. Board culture (critical
questioning), social capital (structural and cognitive),
human capital, and diversity in industrial background were
significantly related to innovation, accounting for 29.8% of
its variance. Board culture (decision-making process and
critical questioning), social capital (structural and cogni-
tive), cohesiveness, and human capital were significantly
related to capacity for innovation, accounting for 49.8% of
its variance. The mediating effect of board effectiveness
was partially confirmed. The effects of board culture
(critical questioning), cognitive social capital, and human
capital on innovation and capacity for innovation were
either partially or fully transmitted through board effec-
tiveness. Based on the results of this study, practice
implications are discussed. The author wants to thank three
anonymous reviewers for their constructive feedback and
suggestions for improving the manuscript and Jinn Jonp
(JJ) Bau, Ph.D. from OIBR at the University of Georgia for
helping with statistical analyses.
Keywords Board of directors
Innovation
Board
effectiveness
& Kristina Jaskyte
kjaskyte@uga.edu
1
School of Social Work and Institute for Nonprofit
Organizations, University of Georgia, Athens, GA, USA
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Introduction
Increasing government and public demands for greater
effectiveness and changes in political, economic, and social
environments demand that nonprofit organizations become
more entrepreneurial and innovative in service provision
and in their business models (Seelos and Mair 2012).
Innovations, which entail the implementation of an idea,
service, process, procedure, structure, system, or product
that is new to the prevailing organizational practice, can
help organizations grow in terms of efficiency and quality
of products, processes, and services, as well as knowledge
and human experience (Jaskyte 2012). Innovation process
as a focused effort can result in achieving increased eco-
nomic and social potential. While innovation process will
naturally involve unsuccessful ideas, by definition the end
result must be positive because innovation is meant to add
value to the customer.
Considering innovation’s potential to contribute to
nonprofit organizations’ success, one might wonder—
where should the vision and energy needed to drive inno-
vation come from? Given boards’ influential role in guid-
ing important strategic decisions and their ultimate
authority and accountability for the leadership and gover-
nance of nonprofit organizations (Renz 2010), one would
expect that boards would play a major role in fostering
innovation. Board members can support organizations’
innovative responses by creating valuable links to resour-
ces and relationships that are needed to support such
activities through their useful contacts in business, finan-
cial, and political circles (Coombes et al. 2011; Nicholson
and Kiel 2004). Board members can also influence inno-
vation indirectly, by creating a climate conducive to
innovation, setting goals and priorities for innovation,
providing freedom to come up with new ideas, encouraging
Voluntas (2018) 29:1098–1111 1099

Fig. 1 Board governance for

innovation model. Variables
were identified as board BOARD ATTRIBUTES
attribute or board process for the Board human capital BOARD EFFECTIVENESS
purpose of discussion. They are Board size
separate and independently Board diversity Strategic involvement task INNOVATION
acting variables. Board tasks Resource acquisition/
BOARD ATTRIBUTES
Board human capitalBOARD
Board size
Board diversity
BOARD PROCESS
Board
ES
Board culture
social capital
Board cohesiveness
EFFECTI
INNOVATION
Strategic involvement
Resource acquisition/
networking task
Monitoring
task
task

were also treated as separate and BOARD PROCESSES networking task

Board culture Monitoring task
independently acting variables
Board social capital
Board cohesiveness

innovation, and approving innovative proposals (Daft
1978).
Despite the increasing attention from the media as well
as from scholars, the topic of board leadership and inno-
vation in nonprofit organizations remains under-researched
(Twersky 2014). Carver wrote in 2000 ‘‘the boardroom is
the most fitting site for the next significant management
revolution. Every other aspect of enterprise has received
more study, more model-building, and had undergone more
painful self-examination than has the most powerful
function of all’’ (p. 77). Seventeen years later, the topic of
board governance and innovation has not seen much pro-
gress. Although boards of directors have been studied
extensively in diverse disciplines, those studies have
focused primarily on the structure of boards and their
makeup and how they influence financial performance.
This study drives the field of governance and innovation
forward by linking relevant research and theories to
explore whether and how boards of directors can contribute
to innovation of nonprofit organizations. Going beyond the
existing board research that has primarily examined board
attributes (size, diversity, structure) and their effect on
various organizational outcomes (Macus 2008), the author
relied on the Board governance for innovation model
(Jaskyte 2012) to highlight board processes and attributes
as well as specific board tasks as predictors of innovation.
While some of the links explored in this research were
tested across a number of different studies in business,
public, and nonprofit sectors, multiple direct and indirect
linkages have not been tested in a single study.
This paper proceeds as follows. First, the author dis-
cusses the direct relationship between board attribute and
process variables and organizational innovation, which
leads to two hypotheses. Next, the relationship between
board attribute and process variables and board effective-
ness is discussed as a precondition for testing a mediation
model. Lastly, the relationship between board effectiveness
and organizational innovation is explained, leading to the
third hypothesis on the mediating effect of board
effectiveness on the above relationship. After presenting
methodology and results, the paper concludes with a dis-
cussion of results and their implications for practice.
Literature Review
When exploring the influence of boards of directors on a
variety of organizational outcomes, researchers have
focused mostly on board’s attributes and tested ‘‘partial
models’’ that varied in complexity and included a limited
number of board descriptors and organizational outcomes
(Macus 2008; Nicholson and Kiel 2004). Unfortunately,
the research on boards has been criticized for failing to
explicitly consider board processes and their influence on
organizational outcomes (Coombes et al. 2011). In the
following sections the author identifies board attribute and
process variables that are central for innovation and dis-
cusses board effectiveness as a mediator variable (Fig. 1).
Board of Directors and Innovation: Direct Effects
Board Attribute Variables and Innovation: Direct
Effects
Among the board attribute variables that have been shown
to be associated with innovation are human capital, size,
and diversity. The board human capital, consisting of
experience, expertise, knowledge, skills, and reputation,
can have an impact on not only effective governance but
also on strategic change and innovation (Letendre 2004;
Nicholson and Kiel 2004; Westphal and Frederickson
2001; Wu 2008). Board members that possess and use their
knowledge, expertise, skills, and reputation can contribute
significantly to the innovation process by making use of
their capital to come up with new and innovative ideas and
to secure resources needed for the implementation of
innovations (Subramaniam and Youndt 2005).

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1100 Voluntas (2018) 29:1098–1111

Additionally, they can rely on their professional knowledge innovation. Due to a lack of agreement among the authors
and experiences when deciding on strategic preferences and mixed empirical results it was hypothesized that:
(Wu and Lee 2007). It was thus hypothesized that:
H3 Board diversity will be related to innovation.
H1 Board human capital will be positively related to
innovation. Board Process Variables and Innovation: Direct
Effects
The existing literature suggests that the effects of board
size on innovation can be both positive and negative. A
While board attributes have a potential to impact innova-
large board means a greater pool of potential organization
tion, multiple disciplines are recognizing that governance
supporters, as well as higher visibility in the local com-
is a group process and that considering group behavior may
munity (Provan 1980). Additionally, larger boards will tend
be critical for understanding how board inputs can be
to have more knowledge and skills at their disposition and
effectively transformed into innovation (Finkelstein and
a variety of perspectives on organizational issues. As board
Mooney 2003). Among the major variables falling under
size increases, however, boards can experience group
board processes category are social capital, board culture,
dynamic problems associated with large groups. Large
and board cohesiveness.
boards can become difficult to coordinate; they can expe-
Social capital is a compilation of the resources that
rience communication problems, and it may be difficult to
accumulate to an individual or group by virtue of pos-
establish interpersonal relationships among the board
sessing mutual acquaintance and recognition (Bourdieu
members (Alexander et al. 2001). Because of a lack of
and Wacquant 1992). There are three types of social cap-
agreement among the authors and mixed empirical results
ital: structural, relational, and cognitive (Nahapiet and
it was hypothesized that:
Ghoshal 1998). The structural social capital refers to the
H2 Board size will be related to innovation. ties within a social network and is believed to influence
how information is shared among the members, which
Board diversity, or the degree to which a board is
allows for rich discussion of the organization’s most crit-
heterogeneous with respect to informational and demo-
ical issues, and exploration of creative thought and
graphic attributes, has been linked to innovation (Carter
reflection (Fredette and Bradshaw 2012). The relational
et al. 2003). Among the forms of diversity that are job
social capital that focuses on the quality of the relation-
related in the context of board work are race, age, gender,
ships among board members provides the basis for col-
educational background, and functional background
laboration, through which creative ideas can be generated.
(Wiersema and Bantel 1992). While forms of diversity are
Members of boards with high relational capital will expe-
numerous, the majority of research has focused diversity in
rience relational closeness and hold beliefs that their col-
terms of race, gender, and age. In the context of innovation,
leagues are trustworthy (Fredette and Bradshaw 2012), all
other forms of diversity, such as personality, and industrial
of which provide a productive work space needed for
and professional background, are especially relevant. A
creativity and innovation to flourish. In fact, relational
broad base of knowledge, skills, and information that
capital has been shown to contribute to innovation per-
characterize diverse groups, can allow for innovative ideas
formance in complex environments (Lorenzoni and Lip-
and contributions (Adobor 2004). Diversity can promote a
parini 1999). The cognitive dimension of social capital
better understanding of the external environment, produce
pertains to shared meanings and common values as well as
more effective problem-solving, provide diversity of
collective goals and a shared vision. In summary, those
information sources, enhance the effectiveness of leader-
core dimensions of social capital are seen as critical for
ship by providing a broader perspective on a variety of
effective group functioning (Fredette and Bradshaw 2012)
issues, and help secure critical resources (Carter et al.
and for adaptive efficiency, which refers to innovation,
2003; Wiersema and Bantel 1992). While some results of
value creation, and enhancements obtained through col-
empirical research point to a positive relationship between
laboration (Nahapiet and Ghoshal 1998).
heterogeneity and innovation, some authors argue that if
In line with the reviewed theoretical propositions, it was
boards become too diverse, this relationship can become
hypothesized that:
negative. For example, while having board members with a
variety of functional backgrounds can increase the levels of H4 Board social capital will be positively related to
resources, at the same time it can contribute to lower levels innovation.
of social integration, higher levels of conflict, and com-
Another board variable under the board processes cate-
munication and coordination difficulties (Forbes and Mil-
gory that has been positively linked to innovation is board
liken 1999), which can have a negative effect on
culture. Because working on any task is a social process

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Voluntas (2018) 29:1098–1111 1101

that involves interaction and exchanges between employ- cohesiveness and innovation can be curvilinear, where
ees, group culture or members’ shared values, norms, and lower to moderate levels of cohesiveness can facilitate
beliefs about board functioning are believed to effect innovation. Once the board cohesiveness reaches high or
innovation and creativity (King and Anderson 1995; extremely high levels, it can become an inhibiting factor.
Woodman et al. 1993). Nadler (2004) identified the fol- Cohesion and uniformity can result in a lack of reflection,
lowing norms of an effective board: honesty, being con- which will inhibit the board’s capacity to anticipate and
structive, willing to ask questions and challenge others, and successfully respond to new circumstances. Because of a
actively seeking out other directors’ views and opinions. lack of agreement among the authors and mixed empirical
Sonnefeld (2002) suggested that great boards have cultures results it was hypothesized that:
of open and respectful dissent. Other authors have similarly
H6 Board cohesiveness will be related to innovation.
noted that an open board culture stimulates debate and
allows taking advantage of available expertise (Faulk 1982;
Jehn 1995). A decision-making culture, which is charac-
Board of Directors and Innovation: Indirect
teristic of active boards, has been shown to encompass
Effects
openness and generosity, creativity, criticality, and pre-
paredness and involvement. Two of those dimensions—
Board Attribute and Processes Variables, Board
creativity and preparedness—were related to board’s
Effectiveness, and Innovation: The Indirect Effect
advising and strategic participation (Huse 2007). In yet
another study, Prybil and his colleagues (2005) found that
While majority of board studies have focused on a direct
the main differences between high performing organiza-
relationship between board variables and innovation (Huse
tions and low performing organizations related to the
2007; Wiersema and Bantel 1992), the existing manage-
governance culture, those traditions and beliefs that prevail
ment literature points to an indirect relationship, where
when board of directors come together to carry out their
board attributes and processes influence board effective-
responsibilities. The cultures that boards of highly effective
ness (its ability to perform a number of tasks), which, in
organizations had were proactive, interactive, and open to
turn, affects innovation (a mediation effect). Governance
dialogue and debate. In summary, the literature suggests a
theories suggest that board effectiveness encompasses two
positive relationship between certain aspects of board
functions, internal control function and/or external control
culture, such as decision-making, critical questioning,
function, depending on the needs of an organization
constructive conflicts, and positive relationships among
(Miller-Millesen 2003; Mizruchi 1983). Both external and
board members and innovation. In line with the reviewed
internal control functions of board members are important
literature, it was hypothesized that:
for innovation. Among specific tasks that are central for
H5 There will be a positive relationship between board innovation are monitoring, strategic involvement, and
culture and innovation. resource acquisition/networking. By performing these roles
well, directors shape, monitor, and evaluate innovation
Board cohesiveness, another board process variable,
performance, help organizations become and stay respon-
refers to the degree to which board members are attracted
sive to external changes, and provide resources, expertise,
to each other and are motivated to stay on the board. More
skills, and connections, which should facilitate innovation
cohesive boards have a good atmosphere in board meetings
introduction and implementation (Deschamps and Nelson
and contribute to the board’s organizational commitment
2014).
and their involvement in organization’s activities (Huse
A number of board attributes have been linked to board
2007). Levrau and Van den Berghe (2007) note that
effectiveness (Zahra and Pearce 1989). While research is
cohesiveness helps with collaboration and communication
limited, different forms of board diversity have been shown
among board members, which influences organizational
to have a positive or a negative association with different
performance. While it is possible that board cohesiveness
board tasks (Haynes and Hillman 2010). For the resource
can have a positive effect on organizational outcomes, it is
acquisition/networking task, the background diversity
also possible that this effect can be negative. In their study
implies different professional backgrounds represented,
of 19 nonprofit organizations Jaskyte and Dressler (2005)
which should result in greater networking, door opening,
showed that high cultural consensus was negatively related
and legitimating. The monitoring task, similarly, is
to innovation. Janis (1983) suggested that cohesive groups
believed to be positively associated with board diversity
with strong directive leaders are most likely to seek uni-
(Minichilli et al. 2009). Differently from those studies, Xie
formity. In such situations, individuals choose not to
and O’Neill (2013) found that functional background
express differing views out of fear of ridicule and rejection.
diversity had a negative impact on board’s ability to
It is quite possible that this relationship between board

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1102
perform resource acquisition and monitoring roles. It is
possible that this type of diversity may impede positive
board dynamics and create communication challenges.
Higher background diversity is also believed to be nega-
tively related to board’s strategic role (Minichilli et al.
2009).
Board size has been linked to board effectiveness. Some
authors suggest that board size is positively related to board’s
strategic involvement and resource acquisition. Larger and
more diverse boards tend to be more outwardly focused
(Alexander et al. 1993). Their role is to link the organization
to its external environment and to minimize environmental
disturbances. Larger boards are also believed to facilitate
debate and discussion regarding the organization’s goals,
objectives, and strategies (Callen et al. 2010). They will also
be more effective in helping nonprofit organizations to
obtain resources. Small boards, on the other hand, will be
more effective at monitoring tasks (Yermack 1996).
The alignment between the board capital (the human and
the social capital) and board’s role set will influence the
board’s effectiveness (Wu and Lee 2007). Availability of a
certain mix of human board capital will enable board
members to carry out their roles, which will in turn result in
higher board effectiveness (Nicholson and Kiel 2004).
Cornforth (2001) in his study of charities found that board
capital (right mix of skills and experience) was positively
related to board performance. Human and social capital have
been linked to board’s ability to carry out their resource
provision and strategic tasks (Haynes and Hillman 2010).
When the board is rich in social capital, for example, board
members may have access to important information through
a variety of industry ties, which will be helpful in carrying
out its strategic and resource acquisition tasks.
Board culture has also been linked to board effective-
ness (Prybil et al. 2005). Nadler (2004) identified the fol-
lowing norms of an effective board: honesty, being
constructive, willing to ask questions and challenge others,
and actively seeking out other directors’ views and opin-
ions. Sonnefeld (2002) suggested that great boards have
cultures of open and respectful dissent. Other authors have
similarly noted that an open board culture stimulates debate
and allows taking advantage of available expertise (Faulk
1982; Jehn 1995). A decision-making culture, which is
characteristic of active boards, has been shown to encom-
pass openness and generosity, creativity, criticality, pre-
paredness, and involvement. Two of those dimensions—
creativity and preparedness—were shown to influence
board’s advising and strategic participation (Huse 2007).
Critical debate, commitment, and emphasis on high
expectations were found to contribute to board’s effec-
tiveness in carrying out strategic, advisory, networking,
and strategic oversight tasks (Amason and Sapienza 1997;
Forbes and Milliken 1999; Minichilli et al. 2009).
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Voluntas (2018) 29:1098–1111
Cohesiveness is yet another board factor believed to
influence board effectiveness. The relationship between
board cohesiveness and board effectiveness is suggested to
be curvilinear (Forbes and Milliken 1999). While some
level of interpersonal attraction is good for communication
and decision-making processes, high levels of cohesiveness
can have a negative effect on the board’s effectiveness.
Cohesiveness was found to be an antecedent to a group-
think phenomenon, which is characterized by lack of
independent thinking and seeking unanimous decisions
(Janis 1983).
While not extensive, existing theoretical literature sup-
ports the final link between board effectiveness and inno-
vation. Resource acquisition/networking task is believed to
contribute to organization’s innovation. The authors suggest
that by performing this role well, directors can provide
resources, expertise, skills, and connections, span the
boundaries, and link the organization to a broader network,
which should facilitate innovation introduction and imple-
mentation (Xie and O’Neill 2013). Board’s strategic
involvement is also seen as central for innovation. Board’s
perception of environmental conditions and the need for
change and innovation will drive the organization’s strategic
direction. Furthermore, a board will be in charge of gov-
erning strategy implementation toward such change, and
continuing to create resource bundles to maintain a com-
petitive advantage (Miles et al. 1978). Finally, board’s
monitoring task, which includes monitoring innovative
performance, risk management and control, evaluating
director’s work, assessing service quality and client satis-
faction, is important throughout the innovation process
(Deschamps and Nelson 2014). When performing these roles
well, directors shape, monitor, and evaluate innovation
performance, help organizations become and stay responsive
to external changes, and provide resources, expertise, skills,
and connections, which should facilitate innovation intro-
duction and implementation (Deschamps and Nelson 2014).
Based on the reviewed theoretical propositions and
empirical evidence it was hypothesized that:
H7 The relationship between board attribute and process
variables and organizational innovation will be mediated
by board effectiveness.
Methodology
Sample
This study focused on service providing associations—The
Arcs. These organizations seek to support full inclusion
and participation of people with intellectual and develop-
mental disabilities in the community throughout their
 Table 1 Correlation matrix and descriptive statistics (N = 349)à
1 2 3 4 5 6 7 8 9 10

1. Innovation .92
2. Cap. for innovation .492** .92
3. Cognitive conflicts (C) .164** .248** .83
4. Dec. making proc. (C) .299** .491** .346** .63
5. Critical questioning (C) .420** .517** .314** .483** .95
6. Relational norms (C) .234** .333** .216** .414** .449** .55
Voluntas (2018) 29:1098–1111

7. Relational (SC) .286** .459** .151** .473** .454** .384** .83

8. Structural (SC) .255** .381** .123** .499** .433** .410** .751** .87
9. Cognitive (SC) .402** .554** .184** .537** .548** .462** .761** .699** .90
10. Cohesiveness .259** .506** .078 .333** .297** .338** .486** .398** .431** .83
11. Human capital .482** .493** .184** .466** .551** .398** .569** .547** .610** .329**
12. Functional div. (D) .177 .107* .010 - .070 .118* .030 .145 .060 .118* .023
13. Personality div. (D) .142 .127* .036 - .026 .097 .022 .173 .065 .121* .045
14. Ind. backgr. div.(D) .094 .155** .034 - .050 .112* .093 .171 .101 .184** .073
15. Racial div. (D) .004 - .015 - .102 - .007 - .076 .007 .019 .006 .006 .031
16. Age div.(D) .032 .081 .074 .016 .010 .083 .094 .033 .030 .083
17. Gender div. (D) .127* .110* - .005 - .036 .087 .091 .149** .038 .139** .040
18. Board monitoring task .580** .498** .181** .421** .524** .336** .421** .448** .550** .360**
19. Board strategic task .534** .495** .092 .385** .519** .266** .546** .499** .598** .303**
20. Board resource task .512** .490** .159** .423** .416** .341** .441** .426** .524** .376**
Mean 4.64 3.26 4.61 5.01 5.69 5.01 6.04 5.66 5.85 3.65
SD 1.22 .53 1.22 1.04 1.16 .923 .887 .953 .999 .425
Skewness - .643 - .574 - .499 - .294 - .593 .169 - .823 - .716 - .913 - 1.35
Kurtosis .318 .291 .353 .363 .106 - .136 .332 1.18 1.33 1.69
11 12 13 14 15 16 17 18 19 20

1. Innovation
2. Cap. for innovation
3. Cognitive conflicts (C)
4. Dec. making proc. (C)
5. Critical questioning (C)
6. Relational norms (C)
7. Relational (SC)
8. Structural (SC)
9. Cognitive (SC)
10. Cohesiveness
1103

123
 Table 1 continued
1104

11 12 13 14 15 16 17 18 19 20

123
11. Human capital .86
12. Functional div. (D) .154** –
13. Personality div. (D) .140** .835** –
14. Ind. backgr. div.(D) .226** .722** .651** –
15. Racial div. (D) .013 .229** .204** .263** –
16. Age div.(D) - .005 .376** .457** .266** .153** –
17. Gender div. (D) .113 .651** .543 .601** .222** .366 –
18. Board monitoring task .441** .115* .116** .105* - .016 .072 .148** .90
19. Board strategic task .620** .264** .267** .227** .062** .046 .183** .520** .88
20. Board resource task .515** .111* .106 .090 .013 .021 .081 .605** .540** .80
Mean 5.49 5.71 5.60 5.59 3.11 4.75 5.24 5.45 5.26 5.28
SD 1.05 1.39 1.31 1.38 1.70 1.44 1.47 1.12 .94 1.18
Skewness - .448 - 1.24 - 1.00 - 1.11 .692 - 1.30 - .715 - 1.16 - .206 - .714
Kurtosis .160 1.23 .827 1.31 - .103 - .628 .164 .131 .131 .134

C Board culture, SC Social capital, D Diversity

**p \ .01
*p \ .01
à
Numbers on diagonal are Cronbach alphas
Voluntas (2018) 29:1098–1111
Voluntas (2018) 29:1098–1111
lifetimes. An invitation to participate in this study was sent
via The National Arc’s list-serve to local chapters of The
Arc across the US. Six hundred twenty-three (623) packets
including an average of ten surveys per packet were mailed
to those chapters. A letter of invitation to participate in the
study was addressed to executive directors or board chairs
(if an organization did not have an executive director).
They were asked to distribute the surveys to their board
members during their next board meeting. Responses were
received from 118 organizations for a response rate of
almost 19%. A total of 349 respondents from those orga-
nizations returned their surveys. Their individual responses
were used in data analyses.
Fifty-nine (59) organizations provided their responses to
a one-page survey gaging the reasons behind non-partici-
pation that was included along with a reminder letter that
was mailed a month later. Two organizations responded
that they were not active. Eight respondents indicated that
their boards were not interested in participating. Twenty-
six (26) organizations did not participate because they did
not have time; six organizations were going through a
major change in leadership. Seventeen organizations did
not participate because they were not a good fit for the
study (e.g., they were not a service providing organization).
Additionally, thirteen (13) packets were returned because
they were undeliverable.
Measures
Innovation For the purpose of this study, innovation was
defined as the implementation of an idea, service, process,
procedure, system, structure, or product that was new to the
prevailing organizational practice. Innovation was mea-
sured using two measures. One measure estimated the
extent to which an organization was known for creating or
adopting innovations—Innovation Survey (Jaskyte 2002),
whereas the other measure captured organization’s capac-
ity to be innovative—Organizational Capacity for Innova-
tion scale (Patterson et al. 2005).
Innovation survey included 15 items about service,
administrative, product, and process innovations. This
measure has been shown to have good psychometric
properties (Jaskyte 2011). For each of the 15 items, par-
ticipants were asked to indicate the extent to which their
organization was known for implementing a specific
innovation (e.g., introducing new services/programs for
new clients; introducing a new way of service delivery;
considerably changing the organization structure to facili-
tate innovation). The responses ranged from 7 = high
extent to 1 = low extent.
The items for Capacity for Innovation scale were
adapted from a measure developed by Patterson and col-
leagues (Patterson et al. 2005). Among the items included
1105
in this scale are: New ideas are readily accepted here; this
organization is quick to respond when changes need to be
made; Management/Board of directors here is quick to spot
the need to do things differently; and Assistance in
developing new ideas is readily available. The answers
ranged from 4 = definitely true to 1 = definitely false.
Cronbach’s alphas for all scales used in the study are
provided in Table 1 (on a diagonal line).
Board effectiveness was defined as the board’s ability to
perform the roles/tasks/functions that are critical for orga-
nization’s innovation—resource acquisition/networking,
strategic involvement, and monitoring. Three resource
acquisition tasks (building networks, lobby and legitimize,
and advice through networks) were assessed using a Likert-
type scale (1 = strongly disagree, 7 = strongly agree)
(Huse 2007). The strategic dimension of board effective-
ness captured the board’s ability to envision and shape the
organization’s future direction and help define a future
strategic approach. This performance dimension was
measured with a 12-item Likert-type scale (1 = strongly
disagree, 7 = strongly agree) (Jackson and Holland 1998).
The ratings of board’s effectiveness in implementing
monitoring tasks were assessed using a 5 item Likert-type
scale (1 = strongly disagree, 7 = strongly agree) (Huse
2007).
Board human capital A four-item Likert-type scale
reflecting the knowledge, skills, and expertise of board
members was used to measure the board’s human capital
(Subramaniam and Youndt 2005).
Board social capital A multi-item Likert scale
(1 = strongly disagree; 7 = strongly agree) was used to
capture three facets of board’s social capital: structural,
relational, and cognitive. Structural social capital was
measured with six items, developed by Hyatt and Ruddy
(1997). Relational and cognitive social capital measures
consisted of six items each, both adapted from previous
work by Leana and Pil (2006). All three scales have
demonstrated good psychometric properties, with Cron-
bach’s alphas ranging from .84 to .93 (Hyatt and Rudy
1997; Leana and Pil 2006; Fredette and Bradshaw 2012).
Board culture, or members’ shared values, norms, and
beliefs about board functioning, was measured using four
scales. Based on theoretical and empirical works, the fol-
lowing aspects of board culture that are central for inno-
vation were measured: cognitive conflicts (three items),
decision-making culture (four items), critical questioning
(three items), and relational norms (six items) (Sellevoll
et al. 2007). All three scales were Likert-type scales
(1 = disagree; 7 = agree).
Board cohesiveness was defined as attraction to the
group, satisfaction with co-workers, and heightened social
interactions among members. Four-item Cohesiveness
123
1106
Index (Seashore 1954) was used to measure it (4 = ‘‘to
great extent’’ to 1 = ‘‘not at all’’).
Board Size was Operationalized as a Number
of Board Members
Board Diversity was measured using a six-item diversity
scale (Sellevoll, Huse, Hansen, 2007). This Likert-type
scale (1 = disagree; 7 = agree) asked respondents to rate
board’s diversity with regard to six backgrounds: func-
tional, industrial, personality, age, gender, and race.
Data Analysis
Because a model underlying this study (Fig. 1) included
three mediators (monitoring, strategic, and resource
acquisition/networking tasks), a multiple mediation design
was employed. According to Preacher and Haynes (2008),
this type of design has received much less attention in the
methodological and applied the literature than a simple
mediation design. As one can see by looking at Fig. 1, the
effects of independent variables on innovation are shown to
be transmitted via multiple pathways. By simultaneously
including multiple mediators the author was able to ‘‘pu-
rify’’ indirect effects by controlling for all the other
mediators.
To test mediation effects in the context of multiple
mediator model, the approach introduced by Preacher and
Hayes (2008) was followed, which permitted all three
mediators (monitoring, strategic, and resource acquisition/
networking tasks) to be entered simultaneously so that their
effects were controlled for one another and were contrasted
in a pairwise manner. A multiple mediator model provided
information on a mediation effect of the set of board tasks
(total indirect effect), the mediation effect of each board
task above and beyond other board tasks (specific indirect
effect), and the relative magnitude of each mediator
(pairwise contrasts).
Total indirect effects and specific indirect effects were
estimated using Process macro for SPSS written by
Preacher and Hayes (2004) (the macro command set can be
found at www.quantpsy.org). This macro allowed testing
the full mediation model, with multiple independent and
mediator variables, and testing each mediation path, con-
trolling for each other mediation path. The results of each
independent variable and mediator are controlled and
independent from the other independent variables and
mediators. Asymptotically correct standard errors were
provided for testing total and specific indirect effects
(Preacher and Hayes 2004). Differently from the interpre-
tation of a single mediation model, where the focus is on
assessing the statistical significance of a and b paths (as
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Voluntas (2018) 29:1098–1111
part of the causal steps model), emphasis in the multiple
mediation model was on the direction and size of the
indirect effects.
Results
Ninety-five point five (95.5%) percent of respondents were
white, 3.3% were African American, and 1.2% were Asian,
American Indian/Alaskan Native, and other. Fifty-seven
point four percent (57.4%) were females, and 42.6% were
males. One point two percent (1.2%) had some high school
education, 11% had high school diploma, 4.1% had tech-
nical degree, 6.5% had associate’s degree, 32.5% had
bachelor’s degree, 5.7% had some graduate school, 29.7%
had master’s degree, and 8.9% had doctorates.
Means, standard deviations, skewness, kurtosis, and
correlations among the variables are presented in Table 1.
Examination of the correlation matrix indicated that cor-
relations between the key variables were of low to high
degree (r = .000 to .874). When multiple regressions were
conducted with board attribute and process variables as
predictors of innovation, the collinearity statistics was
found to be within unacceptable ranges (tolerance values
exceeded .60, and VIF values were greater than 1.6),
suggesting that data of the present study exhibited a mul-
ticollinearity problem. The variables with the highest tol-
erance and VIF values—relational social capital and
diversity in functional background—were excluded from
multiple regressions, which significantly reduced the
collinearity issue. Other variables that were excluded from
multiple regressions were diversity in age and racial
composition because they were not significantly related to
innovation (there was very little variability in both of those
variables); as well as board size, because its relationship
with innovation was nonlinear (the statistical analyses used
in this study are conducive to testing only linear
relationships).
Board attribute and process variables and innovation:
Direct effect. Multiple regression analyses (OLS) were
employed to assess the relationships between board attri-
bute and process variables and innovation (Hypotheses
1–6) (Table 2). Board culture (critical questioning), social
capital (structural and cognitive), human capital, and
diversity in industrial background were significantly rela-
ted to innovation, accounting for 29.8% of its variance.
Board culture (decision-making process and critical ques-
tioning), social capital (structural and cognitive), cohe-
siveness, and human capital were significantly related to
capacity for innovation, accounting for 49.8% of its
variance.
Board attribute and process variables, board effective-
ness, and innovation: Indirect relationship. Multiple
Voluntas (2018) 29:1098–1111 1107

Table 2 Regression of
Board variable Capacity for innovation Innovation
innovation on board attribute
and process variables Board culture: cognitive conflicts .054 (.019) .021 (.049)
(standardized regression
coefficients, with standard Board culture: decision-making process .185 (.027)** .001 (.070)
errors in parentheses) Board culture: critical questioning .190 (.024)** .184 (.063)**
(N = 349) Board culture: relational norms - .050 (.027) - .041 (.071)
Structural social capital: info sharing - .151 (.032)** - .169 (.083)*
Cognitive social capital: shared vision .230 (.034)** .176 (.089)*
Cohesiveness .315 (.202)** .094 (.530)
Human capital .140 (.028)** .343 (.073)**
Diversity: personality background .038 (.022) .119 (.057)
Diversity: industrial background .050 (.022) - .150 (.058)*
Diversity: gender .002 (.018) .084 (.048)
R .705 .546
R2 .498** .298**
Adjusted R2 .481 .275
*p \ .05, **p \ .01

Table 3 Indirect effects of board attribute and process variables through board effectiveness on innovation (N = 349)
Innovation Board culture: critical questioning Cognitive capital: shared vision Human capital
EST SE t EST SE t EST SE T

Total effect of X on Y .183 .062 2.94** .219 .089 2.44* .409 .072 5.70**
Direct effect of X on Y .041 .059 .69 .015 .084 .173 .298 .069 4.33**
Innovation Board culture: critical questioning Cognitive capital: shared vision Human capital
EST SE CI.95 EST SE CI.95 EST SE CI.95

Indirect effects
Total .143 .038 (.078, .229)a .204 .051 (.119, .319)a .111 .048 (.022, .212)a
a a
Monitoring .090 .029 (.044, .157) .115 .039 (.053, .206) .009 .026 (- .042, .061)
Strategic .046 .019 (.016, .095)a .061 .026 (.020, .124)a .069 .030 (.023, .143)a
a
Resource acquisition .007 .009 (- .004, .038) .029 .021 (.002, .092) .033 .024 (.002, .103)a

EST estimates, SE standard error

**p \ .001, *p \ .05
a
95% CI does not include 0. This indicates a significant mediation for the mediator and independent variable, controlling for all other mediators
and independent variables

mediator model was used to test Hypothesis #7. Table 3
shows total effects, direct effects, the bootstrap results for
indirect effects, and the 95% confidence intervals for
innovation. Examination of total effects (the sum of the
direct and indirect effects), direct effects (effect of X on
Y after controlling for the mediators), and indirect effects
(Table 3) showed full mediation for board culture and
innovation and cognitive capital and innovation; and partial
mediation for human capital and innovation. Examination
of specific indirect effects revealed that board monitoring
task reached statistical significance as a unique mediator of
board culture (critical questioning)—innovation relation-
ship (CI.95 .044, .157) and cognitive social capital-inno-
vation relationship (CI.95 .001, .031). Board strategic task
reached statistical significance as a unique mediator of
board culture (critical questioning)—innovation relation-
ship (CI.95 .016, .095), cognitive social capital—innovation
relationship (CI.95 .020, .124), and human capital—inno-
vation relationship (CI.95 .023, .143). Board resource
acquisition/networking task reached a statistical signifi-
cance as a unique mediator of cognitive social capital—

123
1108 Voluntas (2018) 29:1098–1111

Table 4 Indirect effects of board attribute and process factors through board effectiveness on capacity for innovation (N = 349)
Capacity for innovation Board culture: critical questioning Cognitive capital: shared vision Human capital
EST SE t EST SE t EST SE T

Total effect of X on Y .086 .024 3.52** .141 .035 4.02** .079 .028 2.82**
Direct effect of X on Y .063 .025 2.50* .106 .036 2.95* .056 .029 1.91
Capacity for innovation Board culture: critical questioning Cognitive capital: shared vision Human capital
EST SE CI.95 EST SE CI.95 EST SE CI.95

Indirect effects
Total .022 .010 (.006, .045)a .035 .014 (.013, .068)a .023 .012 (.002, .050)a
Monitoring .013 .008 (.001, .031)a .016 .010 (.001, .041)a .001 .004 (- .006, .011)
Strategic .008 .007 (- .003, .024) .009 .009 (- .004, .031) .012 .010 (- .004, .033)
Resource acquisition .002 .003 (- .001, .014) .009 .008 (- .002, .031) .009 .008 (- .003, .027)

EST estimates, SE standard error

a
95% CI does not include 0. This indicates a significant mediation for the mediator and independent variable, controlling for all other mediators
and independent variable
**p \ .001, *p \ .05

innovation (CI.95 .002, .092) and human capital—innova-
tion (CI.95 .002, .103) relationships.
Table 4 shows total effects, direct effects, the bootstrap
results for indirect effects, and pairwise contrasts for
capacity for innovation. Examination of total effects (the
sum of the direct and indirect effects), direct effects (effect
of X on Y after controlling for the mediators), and indirect
effects showed full mediation for human capital and
capacity for innovation, and partial mediation for board
culture and capacity for innovation and cognitive capital
and capacity for innovation. Examination of specific indi-
rect effects revealed that board monitoring task reached
statistical significance as a unique mediator of cognitive
capital—capacity for innovation relationship (CI.95 .001,
.041) and board culture (critical questioning)—capacity for
innovation relationship (CI.95 .001, .031).
Discussion
The results of this study suggest that boards of directors
can play a significant role in influencing innovation. Mul-
tiple regression results demonstrated that board culture
(critical questioning), cognitive social capital (shared
vision), and human capital were positively related to
innovation. The results suggest that having board members
who are creative and bright, are considered the best in the
nonprofit sector, are experts in their professional fields, and
who develop new ideas and knowledge is associated with
higher innovation. Structural social capital (information
sharing) and diversity in industrial background, on the
other hand, were negatively related to innovation. This
suggests that board members’ engagement in open and
honest communication with one another, not having hidden
agendas and issues, sharing and accepting constructive
criticisms without making it personal, discussing personal
issues if they affect their performance as board members,
keeping each other informed at all times, and willingly
sharing information with one another is negatively related
to innovation. Having board members from different
industries (business, government, nonprofit, as well as
different firms) seemed to have a negative impact on
innovation. As this aspect of diversity increased, innova-
tion decreased. It is possible that this type of diversity
inhibited positive group dynamics and impacted its
communication.
Two aspects of board culture (decision-making process
and critical questioning), cognitive social capital (shared
vision), cohesiveness, and human capital were positively
related to capacity for innovation. This suggests that board
meetings that are characterized by very thorough and cre-
ative discussions and fast decision making have a potential
to contribute to increased organization’s capacity for
innovation. Furthermore, board culture that is characterized
by critical questioning of proposals from the management
and raising questions regarding information from man-
agement appears to be conducive to organization’s capacity
for innovation as well. Shared ambitions and vision for the
organization, enthusiasm for pursuing collective goals and
mission, commonality of purpose among the board mem-
bers, and board members’ partnership in changing the
organization’s direction were associated with higher
capacity for innovation (quickly responding when changes
are needed, quickly spotting the need to do things differ-
ently, welcoming new ideas, and quickly changing proce-
dures to meet new conditions). High levels of cohesiveness

123
Voluntas (2018) 29:1098–1111
among board members were also positively related to
organization’s capacity for innovation. Helping each other
on the board, getting along with each other, and sticking
together were positively related to capacity for innovation.
Organizations with boards rich in human capital seemed to
have higher capacity for innovation. Similar to innovation,
structural capital (information sharing) was negatively
related to capacity for innovation.
It is useful to know that while board attribute and pro-
cess variables can be related to innovation and capacity for
innovation directly, their impact can also be indirect. When
testing a multiple mediator model, the author found that the
effect of board culture (critical questioning) and cognitive
capital (shared vision) on capacity for innovation was
transmitted through a set of three board tasks—monitoring,
strategic, and resource acquisition/networking. Human
capital, on the other hand, no longer affected capacity for
innovation after the mediators were controlled.
These results suggest that as a result of board’s critical
questioning of proposals and information received from
management (critical questioning) and having a shared
vision (cognitive capital), the boards were more effective
in performing monitoring tasks in general management
issues, legal and accounting, financial, technical, and
marketing areas. They were also better able to envision and
shape the organization’s future direction and help define a
future strategic approach, as well as to build networks,
lobby and legitimize, and gain advice through their net-
works. When taken together, those board tasks impacted
organization’s capacity for innovation, with the monitoring
task emerging as a mediator with unique effect above and
beyond the other two mediators.
When testing a multiple mediator model for innovation
variable, the author found that the effect of human capital
on innovation was transmitted through a set of three board
tasks—monitoring, strategic, and resource acquisition/net-
working. This result suggests that having boards rich in
human capital influences their ability to perform their
board tasks effectively. Their ability to performing strate-
gic and recourse acquisition/monitoring tasks (which had
unique effects above and beyond other mediators) effec-
tively, in turn, influenced innovation. Board culture and
cognitive capital did not affect innovation directly after the
mediators were controlled for.
Implications for Practice and Limitations
This research demonstrates to practitioners, researchers,
and academics that including boards in our conversations
on innovation in nonprofit organizations makes sense. The
results of this study showed that not only board attribute
and process variables are directly related to innovation, but
1109
they also have a potential to affect innovation and capacity
for innovation indirectly—through board effectiveness.
Boards that are interested in playing a role in facilitating
innovation in their organizations should consider the
importance of critical questioning of proposals and infor-
mation from management. The rubber stamp model of
board functioning, where boards accept and approve the
managements’ decisions/requests without critically exam-
ining the background information, would have to change
into one where boards play an active role and work toge-
ther with an executive director. Additionally, because
decision making characterized by thorough, creative, and
fast discussions has been shown to contribute to organi-
zation’s capacity for innovation, boards should seek to
structure their board meetings to allow for those types of
discussions. Shared vision was another factor that was
significantly related to innovation and capacity for inno-
vation. This suggests that having board members who are
committed to the organization’s goals, who share the vision
for the organization, and who enthusiastically pursue col-
lective goals and mission may be essential for innovation.
Additionally, building boards that are rich in human capi-
tal—are creative and bright, are the best in nonprofit sector,
are experts in their professional fields, and have ability to
develop new ideas and knowledge—is desirable, as human
capital was shown to contribute to innovation.
Interestingly, the organizations with boards that had
members who represented different sectors (nonprofit,
business, and government) had lower levels of innovation,
suggesting that this type of diversity might not be con-
ducive to innovation. It is quite possible that differences in
board members’ values, their work styles, and other work
aspects, that are known to vary across the sectors, made it
for a challenging combination and had a negative effect on
innovation. Sharing information, similarly, was negatively
related to innovation and capacity for innovation. It is
possible that all the aspects of sharing information descri-
bed above actually inhibited innovation and capacity for
innovation—its ability to quickly respond to changes,
quickly spot the need to do things differently, quickly
change procedures to meet the new conditions and address
new issues, always search for new ways of looking at
problems, and readily assist in developing new ideas.
While high level of information sharing can alleviate
anxiety, help control the uncontrollable, bring predictabil-
ity, and clarify the ambiguous, it can at the same time
control any kind of behavior that might disrupt organiza-
tional harmony and predictability. It is possible that high
emphasis on information sharing can lead to the internal-
ization of uniform organizational values and conformity to
the common organizational interests, which may have had
undesired effects on innovation and organization’s capacity
for innovation.
123
1110
The analyses of a multiple mediator model demonstrated
that effectiveness in performing strategic, monitoring, and
resource acquisition/networking tasks is important for
innovation and capacity for innovation. In addition to
considering board attribute and process variables, boards
should seek to evaluate their effectiveness across those
three tasks and work toward making needed improvements
in order to increase board effectiveness, which has been
shown to impact innovation as well as capacity for
innovation.
The results of this study need to be considered in light of
a number of limitations. First, this was a cross-sectional
study that assessed participants’ perceptions at one point in
time. Board processes and board effectiveness tasks are
dynamic constructs that could change over time, and their
interplay is also dynamic. Therefore, future studies should
seek to capture those constructs longitudinally. Second,
because all analyses utilized the survey responses of indi-
viduals, common method bias may have influenced the size
and significance of proposed results. While an independent,
objective measure of organization’s levels of innovation is
always more desirable, such data were not collected during
this study. More objective measures of innovation can be
obtained from form 990 (it includes two questions: ‘‘Did
the organization undertake any significant program ser-
vices during the year?’’ and ‘‘Did the organization cease
conducting, or make significant changes in how it con-
ducts, any program services?’’). Unfortunately, based on
the author’s experience using form 990 to capture this
aspect, such data are not very helpful because the organi-
zations choose to respond mostly ‘‘No’’ to both questions.
Another limitation is response rate. While multiple
response enhancing techniques were used, responses from
organizations were quite low. Fourth, because of the
sample size, a more sophisticated analysis, such as struc-
tural equation modeling, could not be performed. Fifth,
high correlations among the variables may have made the
detection of smaller effects more difficult.
Despite these limitations, the present study provides
interesting insights into the relationship between board
attributes and processes and innovation, as well as into the
mediating role of board effectiveness in the relationship
between board attribute and process variables and
innovation.
Acknowledgements The author wants to thank three anonymous
reviewers for their constructive feedback and suggestions for
improving the manuscript and Jinn Jonp (JJ) Bau, Ph.D. from OIBR at
the University of Georgia for helping with statistical analyses.
123
Voluntas (2018) 29:1098–1111
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