Ends in Policy Governance is a three-fold concept. Ends policies must answer these three questions at least at the broadest level of policy: what benefit? For whom? At what worth?
Sometimes the “at what worth” concept is misunderstood or neglected but it’s a very important component of Ends and demands serious consideration by the board.
In for profit corporations, we expect some kind of Return on Investment or ROI. The “at what worth” part of Ends is a similar idea, and nonprofit and public boards might wish to research the “Social Return on Investment” or SROI concept.
Boards need to think through this question: are the results we’re producing for the recipients *worth* the investment? and that’s including financial and human resources and the opportunity cost.
Or think of the value equation. Does the worth of the results produced for recipients, subtract the investment to create those results, generate a positive net value?
WORTH – INVESTMENT = NET VALUE
Or put another way, does the WORTH / Investment yield a net value or return greater than 1?
Is WORTH / INVESTMENT > 1
Boards should consider whether or not the investment is worth the results. Could any or all of the results be produced as well or better for less by another organization? Could better results be produced if the cash equivalent of the investment were handed out? What value would be lost if the organization ceased to exist?
The “At what worth” policy component goes hand-in-hand with the iterative, dynamic nature of Ends and the systematic feature of Policy Governance. Boards might start with a general “at worth statement,” that is then interpreted by the CEO, which later prompts the board to fine-tune the Ends, perhaps giving priorities to some parts of Ends over others. The first steps are to understand the concept and gather relevant information, and then to have the conversation.
Board must also consider owner input, and know that the reasonableness of the CEO’s interpretation of Ends is going to factor heavily into this process.