Gaining legitimacy in non-profit governance. The role of stakeholder engagement

The growing importance of non-profit organizations (NPOs) in raising the social and economic development of a local community has increased the number of research studies related to NPO governance mechanism features to understand territorial needs. In this sense, the representation of the local community within boards is a governance tool that allows NPOs to increase legitimacy. Moving from Guo and Musso (2007) and Rossi et al. (2015), our research explores how governance dimensions affect representational legitimacy. This paper analyzes among Italian Bank Foundations—organizations where the representation of community within boards is provided by law—the case study “Sigma.” An in-depth analysis of this organization’s practices provides insights from a well-balanced representational mix, and different local stakeholders have different weights in appointing board members. This paper improves the understanding of governance representational dimensions, describing levers that can contribute to gaining trust and increasing the ability to act in the interests of the local community.