Quotation Speckbacher, Gerhard. 2008. Nonprofit versus Corporate Governance: An Economic Approach.. Nonprofit Management and Leadership 18 (3): 295-320.




This article proposes a new theoretical concept of nonprofit governance using transaction cost economics and the economic theory of contracts. After a short review of economic approaches to corporate governance, I clarify the specific nature of the governance problem in nonprofit organizations. Based on this analysis, I derive criteria for selecting an organization's relevant stakeholders. If stakeholders provide valuable specific resources without the protection of a comprehensive contract that details exactly how the organization is to use these resources, then such stakeholders seek decision and control rights in order to direct the use of the resources they have provided. I argue that the core problem of governance is how to enhance valuable specific contributions of the relevant stakeholders while keeping the costs of bargaining between stakeholders and the costs of collective decision making low. The theory developed is then applied in a discussion of practically relevant governance mechanisms, and the concept of governance is used to contribute to the discussion on the strengths and weaknesses of the nonprofit character of organizations from a governance perspective.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Nonprofit Management & Leadership
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new INF-A, STRAT-B, VW-D, WH-B
Language English
Title Nonprofit versus Corporate Governance: An Economic Approach.
Volume 18
Number 3
Year 2008
Page from 295
Page to 320
Reviewed? Y


Speckbacher, Gerhard (Details)
Institute for Strategy and Managerial Accounting IN (Details)
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