After an independent investigation determined that their relief efforts after Hurricanes Katrina and Rita were rife with fraud and mismanagement, and that the organizational culture cared more about publicity than results, the American Red Cross is changing their governance structure:

“We had a board that was designed and set up under guiding principles that are no longer relevant,” said John F. (Jack) McGuire, the Red Cross’s interim chief executive. “We needed to take that board and bring it up to today’s expectations.”

They’re learning a lesson that HP learned recently as well:

“You can’t have two leaders running the organization,” she said. “You have one leader running the organization.” (from original CoP article)

Governance of non-profits is often more difficult than for corporations because the make-up of the stakeholders is so different. Looking at the difficulty huge companies are having, I’m not surprised that large non-profits find themselves with the governance troubles they often do.

Categories: Community, Governance, Philanthropy