The purpose of this research is to achieve soundness and efficiency of management in Non-Profit Organizations. To impliment of the good Governance it is necessary to monitoring and supervise of the Top management by all Direct and indirect stakeholders.
In recent years, scandals have occurred one after another at Non-Profit Organizations such as universities in Japan. For example, the realities of betrayal by executives, cheating in entrance exams, power and education harassment were revealed. In addition, abusing in childcare and Nursing care center, Power harassment at sports-related associations. Such scandals involving to Non-profit Organization which is huge hamper to those Consumers, compared to scandals involving commercial enterprises.
One of characteristics of these scandals are, the consumer is relatively weaker position than the service providers. Therefore, a scandal involving a Non-Profit Organizations could affect greater damage rather than profit organization. Nevertheless, the social impact of Non-Profit Organizations’s scandals is often underestimated because the scale of these scandals is smaller than the Global corporate scandals.
The Japanese Non-Profit Organizations are under the premise that they are Non-profit, but most of these organization are strongly controlled by the founder Family.
In addition, for the practicing the good governance, these organization are establishing the councilor system, which should have the ability to monitor from the outside of organization. But these are just become a formality or just pretend to implement a good governance, which doesn’t work.
However, the issue of governance of Non-Profit Organizations has not been comprehensively research in Japan, although it has been taking with sporadically. Therefore, the issue of Non-Profit Organizations is very important. So, we are assuming that the solution of Non-Profit Organization`s scandals, is need to establishment of management participation system by the outside stakeholders.
It also clarifies that the soundness of management through the exercise of external monitoring capabilities by interested parties or stakeholders. That will lead to the improvement of management efficiency.