MANAGERIAL AND DECISION ECONOMICS Manage. Decis. Econ. 30: 173–182 (2009) Published online 16 October 2008 in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/mde.1443 The Link Between Board Composition and Board Objectives: An Empirical Analysis on Flemish Non-profit Schools Cind Du Bois*, Ralf Caers, Marc Jegers, Rein De Cooman, Sara De Gieter and Roland Pepermans Vrije Universiteit Brussel, Brussels, Belgium Flemish non-profit schools have no legally imposed composition rules with respect to their board of directors. Hence, large variation exists in their size and composition. We argue that these differences in board composition can result in different policies followed by the board. To empirically test this hypothesis we question the board’s chairpersons of Flemish non-profit schools about the objectives set forward by the board. Ordered probit regressions on the importance attached to different educational objectives provide support for our hypothesis and thus alert policy makers to account for the linkages between objectives and board characteristics when formulating legislation with respect to school board composition. Copyright # 2008 John Wiley & Sons, Ltd. INTRODUCTION In recent years, a growing body of research focuses on the legitimacy and effectiveness of the govern- ance of non-profit organisations (NPOs) (e.g. Herman and Renz, 2000). As in the for-profit organisation, the governing board of the NPO needs to oversee the objectives pursued by the organisation and has to defend the interests of the organisation’s stakeholders. Also the idea of New Public Management views formulation and implementation of the organisation’s policy as the key task of the board (Robinson et al., 2003). In contrast to for-profit organisations, where shareholders all share the objective of profit maximisation, the different stakeholders in the NPO do not have such an overarching objective. Hence, the non-profit board also needs to choose the objectives pursued by the organisation (Hermalin and Weisbach, 2003). Since this non- profit board is traditionally composed of different stakeholders of the organisation, we hypothesise that the characteristics of this board will affect the objectives set forward by the board. Recent work on American charter schools (Henig et al., 2005) already shows that the organisation and govern- ance of schools depends on the type of school (profit, non-profit, and public). In the corporate literature, board composition is already longer recognised as being an important determinant of governance (e.g. Barnhart et al., 1994; Coffey and Wang, 1998; Carter et al., 2003; Kang et al., 2007). This research, however, predominantly focuses on the relationship between board member indepen- dency and firm performance, and thus provides little indication as to which other characteristics of board composition can be important in the relationship with objectives and performance. *Correspondence to: Vrije Universiteit Brussel, Pleinlaan 2, 1050 Brussel, Belgium. E-mail: cind.dubois@hubrussel.be Copyright # 2008 John Wiley & Sons, Ltd.