STRATEGIC GOVERNANCE MODEL
CREATING A NEW STANDARD OF EXCELLENCE FOR GOVERNING BOARDS
“Of all the elements in the management of enterprise, none is less studied and less developed than the governing board. Because governance has rarely been the subject of rational design, boards persistently fall into trivia, short-term myopia, meddling in the staff (and/or committee) work and other failings. They do so even when composed of intelligent, experienced, caring members. In North America we have over 5 million governing boards (not-for-profits), each relying on the inadequate job design we have all inherited.” This is how John Carver, internationally recognized as the creator of the break-through in board leadership known as the Policy Governance characterizes today’s not-for-profit boards.
Policy Governance is not intended for the boards who are in trouble, it is intended for the boards who wish to reach for a new level of excellence. Policy Governance is a conceptual model meant to enable the strategic leadership by the governing board. It addresses board job design and the board-management partnership. The board is intrusted by the organizations owners to govern by focusing on strategic leadership and long-term direction setting while the management (and or committees) focuses on near-term operations to produce the results defined by the board.
In Policy Governance the board is proactive, not reactive and the chief staff executive is empowered to make any reasonable interpretation of board policy within established executive limitations. The board governs by adopting written statements (called policies) to guide the work of the organization and management. There are typically four types of governance policies that form a unified basis for Policy Governance.
Note The following was excerpted from a report….. There are two methods of developing new policies. One is to develop policies that lead the staff, instructing them on what to do and often how to do it. The other is to develop policies that instruct the staff on what they are expected to accomplish and set limits within which the staff must work. We recommend the latter, which is generally called “policy governance”1 or our preference, “strategic governance.” Under strategic governance, Policy is a tool, the board is proactive, not reactive, and the staff, committees and task forces are empowered to make any reasonable interpretation of board policy within established limitations. The board governs by adopting written statements (called policies) to guide the work and management of the organization. There are typically four types of governance policies that form a unified basis for Policy Governance.”
Ends Policies: What results will the organization achieve in terms of benefits created for what people at what cost? (Cost may be dollars, organizational disruption, unusual effort by volunteers, angering some members, slow growth, etc., etc.) Examples of ends policies would include: Vision, Purpose, Mission, Objectives, Priorities, and Outcomes.
Governance Policies: The board’s own job description; its “style” of governance, roles of board members, officers, and the appropriate role of committees and task forces. Examples of governance policies would include: Global Governance
Commitment, Governing Style, Board Responsibility, Agenda Planning, Officers Role, President’s Role (and other individual officers), Board Members Code of Conduct, Committee Structure, Board Committee Principles, Staff Committees, and Cost of Governance.
Board-Chief Staff Executive Relations: The role of the chief staff executive (CSE) and the chief staff executive’s accountability to the board through monitoring. The board deals with the organization’s staff through the chief staff executive, who alone among all employees of the organization is directly accountable to the board as a whole. All other employees of the organization are accountable to the chief staff executive. Examples of board-chief staff executive relations policies would include: Global Board-CSE Linkage, Unity of Control, Accountability of the CSE, Delegation to the CSE, and Monitoring CSE Performance.
Executive Limitations Policies: The means, methods, and techniques that are not prudent or ethical for management to use in achieving the results stated by the board in their Ends Policies. All means and methods not prohibited in this section are permitted. Examples of Executive Limitations policies would include: Global Executive Constraint, Treatment of Consumers, Treatment of Staff, Financial Planning and Budgeting, Financial Condition and Activities, Emergency CSE Succession, Asset Protection, Compensation and Benefits, Communication and Support to the Board, and Ends Focus of Grants or Contracts.
The Ten Points of Policy Governance …
1. The board stands in for those who own the organization.
2. The board speaks with one voice or not at all. The board will allow no officer, committee, or individual board member to come between the board and the chief staff executive.
3. The board directs the organization by addressing Ends and Executive Limitations policies to the CSE.
4. The board instructs no staff but the CSE.
5. Ends and means are distinguished from each other only according to whether an issue describes (1) what outcome or difference is to be produced, (2) for whom it is to be produced and, (3) the worth or cost of the outcome. An issue that describes one or more of these attributes is an ends issue. An issue that does not describe one or more of these attributes is a means issue. Because a matter is important does not make it an ends issue, nor the boards wishes to control an issue does not make it an ends issue.
6. The board controls ends issues positively - by prescribing certain ones.
7. The board controls staff means issues negatively - by prohibiting certain ones.
8. The board defines issues from the most general level of specificity to that more detailed level of specificity, which will allow it to delegate any reasonable interpretation of its words.
9. The board may change the level of specificity of its policy making at any time.
10. The board monitors performance against its policy words.
Complied by: Catalyst Group of Alexandria
Richard F. Dorman, CAE
1 Excerpted from materials and books prepared and distributed by John Carver, Ph.D., Carver Governance Design, Inc. Books: Boards That Make a Difference, Reinventing Your Board.
1 Carver, John. Boards that Make a Difference: Reinventing Your Board. San Francisco: Jossey-Bass, 1991; Carver, John and Carver, Miriam. Your Roles and Responsibilities as a Board Member. San Francisco: Jossey-Bass, 1996.