Susan Mogensen 
July 24, 2025How Policy Governance® Resolves the Common Complaints
The first of two parts
By Susan Mogensen
This article was originally published in Board Leadership No. 91 (May – June 2007).
I was puzzled. A question posted in an online discussion forum with the subject header, “Non-hierarchical governance structures,” asked for thoughts and information regarding “nonprofit governance structures that do not fit what has become the standard org-chart model of hierarchical chain of command.”1
As soon as you accept that boards are accountable to moral or legal owners, a hierarchy has been born. If we go one step further to say that CEOs are accountable to boards, we have established a three-tiered hierarchy that delineates clearly who is accountable to whom. Even if individuals in this system wear more than one hat (a CEO who also serves on the board, for example), there is a still a hierarchy of roles, and a principle of “sequentially linked authority” that “connects these elements of enterprise from owner on through to filing clerk,” as Carver stated in Issue 12.
My bewilderment stems from the understanding that governance is, by definition, a hierarchical concept, and so to seek non-hierarchical governance seems like looking for a clock that doesn’t keep time. I also appreciate the ways in which “Policy Governance seeks to ameliorate the potentially negative effects of hierarchy,” (John Carver, Board Leadership Number 12, March – April 1994) and accept that hierarchy is neither morally beneficial nor intrinsically non-beneficial. As Carver succinctly put it, “Hierarchy is.”
To contemplate no hierarchy at all would require at the very least that boards not be accountable to owners, or possibly to have owners, boards, CEOs and staff members all equally accountable to each other, in which case one can well imagine that all would be accountable to no one. It would be an interesting social experiment, perhaps, but other insights into creating highly effective human systems are more worthy of our attention.
Let us assume, then, that the troubles attributed to “hierarchical governance” do not relate so much to the existence of an order of who is accountable to whom, but rather to the irresponsible use of power, and other factors that must be indentified. John Carver was right: hierarchy just is. Now, how can we ensure that it is fair?
As a child in the schoolyard, I remember playing a game called “King of the Castle.” The idea was simply to climb to the top of a huge, icy pile of snow, and once there, you had to do everything necessary to ensure you were the only one standing on the top. Game-players were divided into two classes. Either you got to the top and achieved the title of king of the castle, or you did not achieve the summit are assumed the status of a “dirty rascal,” according to the singsong chat that accompanied the game.
King of the Castle illustrates the worst we might see in a hierarchical system. First, the top authority is vested in a single person. (For some reason, our schoolyard game never morphed into seeing how many children could get to the top, and then strive to stay there, as a co-operative group, but I digress). Second, the king is allowed, if not expected, to be as ruthless as necessary to maintain that position, to the detriment of those below. Everyone has seen such kings in action, from cruel dictators to despotic chairs and CEOs to arrogant bosses.
Now, there are instances of benevolent dictators or enlightened despot, who, for whatever reason, choose to be fair and to “transcend” their personal interest to do what’s best for the common good. So while there is still have a single authority at the top, at least the supreme autocrat is nice about it, most of the time.
Still, even if people are lucky enough to have a benevolent dictator, most would feel much more comfortable if this dictator were in some way accountable to them, the citizens. Just in case the dictator eventually loses his or her mind, friendly disposition, or general interest in the common good, citizens should have the ability to choose this person or another leader: let the will of the people decide.
Now, with this system, some progress has been made. By making this single authority accountable to the people, on a periodic basis, the risk that he or she will run amok is mitigated. Then again, even though this authority’s power is subject to review every few years, would it not seem better still if this authority’s power were not concentrated in the hands of one person, but rather shared in the collective hands of a group? This way, we can increase the odds that the diverse views of “the people” will emerge in the discussions of this group authority, and one would also have a more sustainable and practical way of keeping the singular authority — who reports to this group authority — in regular check.
So then we have arrived at a system that is hierarchical, to be sure, but also one that in no way resembles the King of the Castle model. Instead of one person at the top, we have vested the highest authority in what is typically the largest collective (the citizens or owners), who then empower what is normally a smaller sub-set of representatives (a board, council, or legislative body), who then delegate authority to the operational side of the organization.
If this operational side is led by one person (in the CEO function), the uppermost portion of our hierarchical organization looks more like an upside-down triangle, and not the pyramid that is commonly associated with authoritative organizations or systems. The emphasis here on having the top-level authority vested in the owners (citizens, shareholders, members, and so on) should resonate with anyone who believes in basic democratic principles, and, perhaps, those seeking new governance models.
The inherent fairness of this system is not attributable so much to the fact that, most commonly, the ownership group at the top is the largest group of people in the hierarchy, but rather that the whole entity is subservient to the ownership — moral, legal or otherwise. Unless one believes that it is wrong to own things, even if legitimately obtained, or (b) it is wrong to have a say about the things one owns, even if that authority is subject to the law and social acceptability, the primacy of the ownership community in a governance system has to be acknowledged. It is a telling characteristic of most governance discussions that this crucial starting point is overlooked or is viewed as unimportant.
The supremacy of owners does not depend on the form the entity takes, whether they be the citizens of a municipality, shareholders of a corporation, or members of a trade association. This ownership group is still positioned at the top of the hierarchy, subject only to legal, ethical and social laws and norms imposed on it by the broader society.
This is where Policy Governance starts, with accountability flowing from the owners, to the board, to the CEO and staff, with each tier empowering the tier below to achieve results. A clear chain of command, and a hierarchy of interests, has been established. That said, how does Policy Governance help organizations avoid the abuse of hierarchy, both in the governance and management contexts? Can a system be both hierarchical and fair to people at the same time?
In the next installment of this article, I will attempt to answer this question by looking at the ways in which hierarchy is typically abused in organizations, how Policy Governance principles mitigate these common abuses, and how organizations using Policy Governance can not only mitigate these abuses, but also set new standards in how fairly people are treated. While the quest for “nonhierarchical governance structures” clearly seems misdirected, Policy Governance advocates recognize the desire to search for ways that organizations can be governed fairly and accountably. It is, after all, that very kind of search that led to the creation of Policy Governance over thirty years ago.
1Posting in the ARNOVA listserv, Nonprofit and Voluntary Action Discussion Group, by Hildy Gottleib, June 16, 2006.
