Strategic Planning in Policy Governance (Carver model)

Strategic Planning, Policy Governance-style

Susan Mogensen

October 27, 2017

In Brief

Policy Governance is a board governance model that clarifies the distinction between governance and management. In strategic planning, Policy Governance principles focus the board on outcomes, accountability, and organizational direction rather than operational decisions.

I often get asked, “How do boards using Policy Governance do strategic planning?”

Policy Governance principles provide clarity around who is accountable for which of the many elements traditionally contained within a strategic plan. In a nutshell, the board initiates the process at the broadest, most strategic level, delegates the accomplishment of its direction, and then checks for evidence of accomplishment of a reasonable interpretation of its direction. Here are 10 distinct steps in this process, along with the accountability for each.

The board initiates the strategic planning process

Step 1: The board must first know to whom it is ultimately accountable, otherwise known as the “moral/legal ownership.” The owners might be defined as members, citizens, a regional community, people sharing a passion, or, in the case of for-profit corporations, shareholders. Take no further steps until the board is clear on the legal/moral ownership definition. Accountability: Board

Step 2: The board obtains owner-level input from its owners by asking questions about the overall purpose of the organization and the difference in the world it should make. An owner-level question might be, for example, “If our organization is being successful, who in the world is benefitting in what way?” Accountability: Board

Step 3: The board also seeks, reviews, and analyses information from other sources, e.g., demographic information, industry research, and environmental scanning data. Accountability: Board

Step 4: The board considers the owner-level input, other good information, adds its own wisdom, and then creates or revises its Ends policies accordingly. (Seven examples of Ends policies are available here.) All other policies (Executive Limitations, Board-Management Delegation, and Governance Process) should exist as well. Accountability: Board

CEO interprets policies, plans, acts, and reports

Step 5: The CEO (or whoever fills the lead operational role) then interprets the Ends, justifying the reasonableness of each interpretation and showing how achievement of each policy will be measurable or observable in some way. Accountability: CEO

Step 6: Plans, budgets, strategies, tactics (the “means”) are devised in order to achieve the Ends interpretations. Accountability: CEO

Step 7: The CEO and staff then carry out the plans and activities needed to achieve the outcomes outlined in the Ends interpretations. All operational activities must take place within the boundaries set by the Executive Limitations. Accountability: CEO

Step 8: Evidence of the outcomes of these activities are then aligned and reported together with the interpretations, and submitted in a monitoring report to the board of directors according to the monitoring schedule or on request by the boards as a whole. Accountability: CEO

Board assesses reports and shares results with ownership

Step 9: The board then assesses the monitoring report to ascertain if (1) the interpretations are reasonable, and (2) if the evidence supports compliance with or achievement of the interpretations. Accountability: Board

Step 10: Ends monitoring information is shared with the ownership and the process repeats. Accountability: Board

Note: The board, CEO, and staff can participate together in a group strategic planning session delving into steps 3 – 6, as long as everyone knows and acknowledges who is ultimately accountable for fulfillment of each step. A facilitated workshop could, for example, include board members who provide ideas or advice as “volunteer staff” (rather than as a board authority) for steps 5 and 6. Likewise, the CEO might offer the board advice and/or logistical support with steps 2 – 4. We recommend working with an experienced governance coach to ensure that collaboration does not result in confusion.

Boards might also choose to check the reasonableness of Ends interpretations before steps 6 and 7 take place, in which case they would request an interim or special Ends monitoring report showing the interpretation section only. Once the board deems the interpretations reasonable, the rest of the cycle can continue.

Learn More

Need more info about this process? Check out our online board education program and access our Quick Guide in the Ten Steps in Strategic Planning, Policy Governance-style.