When the Law Shapes Nonprofit Boards: The Key Role of Local Stakeholders

The study investigates how governance mechanisms can affect communityrepresentation within nonprofit organizations, focusing on Italian Bank Foundationswhere the community is on board by law. To investigate what governance arrangementsincrease substantive and symbolic representation, the study adjusts Guo and Musso’sframework by considering several formal mechanisms for appointing board membersand the residence of board members as a new aspect of descriptive representation.A content analysis of the statutes and an email survey show that formal mechanismscontribute to substantive representation, whereas descriptive and participatoryarrangements enhance symbolic representation. In addition, this study explores themoderating influence of local stakeholders in appointing board members, offering awider point of view on the relationships among the five dimensions of representation.