Analysis on Effective Governance of NPO: Based on Principal-agent Theory

In non-profit organizations, the incomplete ownership has led to the dispersion of control power, and the "non-profit distribution" restriction has brought special insider-control problems, and therefore the governance of NPO face a complex multi-principal-agent relationship. In this paper, a simplified game model has been used to analyze the basic conditions for effective governance of NPO. The conclusion is that a strong and effective board system is the basis for effective governance of NPO, reasonable monitoring and incentive mechanism is the security for effective governance of NPO, and clear performance information of public service is the key to effective governance.