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Q. Why is governance important?
A. Because everything starts at the top. If the board of directors doesn't have a coherent system for governing, or has rules but doesn't follow them, the whole organization suffers. We expect managers to use systems for everything from record-keeping to accounting to HR, and should expect no less from boards of directors for governing.
Q. What is a typical problem faced by boards?
A. Boards often see themselves as another layer of management and get too deeply involved in the day-to-day operations of the organization rather than directing and protecting the organization for the benefit of its members, shareholders, or owners. Staff might generate reams of reports for board members to read, for example, in order to win approval for a project or just because it has always been done that way. Besides wasting time, information overload gets the board bogged down in too much detail, leaving no one to look at the big picture. More importantly, boards usually fail to take their deliberations beyond the details of the information they receive and decide as a group which criteria and values would differentiate approvable staff activity from unapprovable staff activity. Taking this step can save tremendous time and resources normally spent by both boards and staff.
Q. Doesn't the board need to know what management is doing?
A. Yes, but only according to specific monitoring criteria that it must devise within its policy framework and communicate in writing to the CEO. The board should create policy specifying what information it really needs to have in order to assure itself that the CEO is achieving the ends of the organization within a set of prescribed limitations. Boards should control all they must, not all they can.
Q. Our board is composed of directors from across the country, specifically appointed to represent different regions. When they come to the table, they never seem to agree on anything and always seem to split on regional lines. What can we do?
A. This is a very common board tension. What all directors need to understand is that when they sit at the board table of a national organization, their first loyalty is to the ownership group of that national organization. They can and should bring the views of their region to the table. But when all is said and done, when participating in a meeting of the national organization, their decisions must be based on the best interests of the national, not the state/provincial or other entity. If directors continually find themselves in a position of conflict between a national and a regional board, they should consider stepping down from the board with which they feel less affinity.
Q. Isn't a diversity of opinion a good thing?
A. Yes, and vigorous discussion around the board table is healthy. Once a decision is made, however, it is important that the board communicate that decision to the CEO with one voice.
Q. What do you do when the CEO gets conflicting instructions from different directors?
A. The CEO should take its direction through clearly written policy decisions of the board, and directors should not create confusion by making requests of staff members one-on-one. Staff receiving conflicting instructions from directors should refer the issue to the CEO, and both board and staff should receive training or otherwise develop a clear understanding of the roles and relationships between, directors, CEO and staff.
Q. What is the Policy Governance® model?
A. Policy Governance is a framework of principles designed by Dr. John Carver that:
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brings exceptional clarity to the role and functions of the board vs. the CEO/Executive Director, and staff; |
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organizes, and aids development of board policies in a useful, clear, and consistent way; |
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helps boards to be completely accountable for their organizations, while simultaneously enabling maximum freedom for the staff to do its job. Yes, it is possible! |
This framework can be used effectively in its entirety by any type of board -- profit or non-profit, with paid staff or without, and with committees or without. It does not tell boards what its policies should be, or what results the organization should produce, but rather how to govern an organization effectively on behalf of an ownership.
Q. What are the Policy Governance® principles?
A. Principles at the core of the Policy Governance system are:
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Governance is a function of ownership, not management; |
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Boards are the highest authority under owners; |
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Boards are the initial authority within the organization; |
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Board authority is group authority; |
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Boards are accountable to owners for everything within the organization; |
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Boards need to empower those to whom they delegate authority while remaining fully accountable for the use of their authority. |
Q. How do we learn more?
A. Contact us at Brown Dog Consulting. We would be delighted to answer any other questions you might have. In addition to working with and sitting on boards herself, Susan Mogensen has been personally trained by Dr. John Carver and Miriam Carver in Policy Governance principles and implementation. Brown Dog Consulting offers workshops, orientation sessions, and presentations to suit every need and budget. |
