One of the most unique features of the Policy Governance system is the Executive Limitations principle, which states:

“The board defines in writing its expectations about the means of the operational organization. However, rather than prescribing board-chosen means — which would enable the CEO to escape accountability for attaining Ends — these policies define limits on operational means, thereby placing boundaries on the authority granted to the CEO. In effect, the board describes those means that would be unacceptable even if they were to work. These are Executive Limitations policies.” (Carver, John, and Miriam Carver. A Carver Policy Governance Guide, the Policy Governance Model and the Role of the Board Member. John Wiley & Sons, 2009.)

This principle is often misunderstood or mischaracterized by people stating that the boundary-creating nature of Executive Limitations equates to being “negative,” when in fact the exact opposite is true. CEOs and staff people working with Policy Governance boards truly appreciate the freedom to operate inside clear boundaries, and often can’t imagine working in any other way.

The top five benefits of using Executive Limitations policies are:

5. Fewer policies are needed.

Because boards need only put off-limits those actions and situations that would be considered unacceptable even if they were effective in achieving the Ends — rather than prescribing all the steps or operational decisions the CEO and staff need to take — far fewer policies need to be created. Having fewer policies enables easier compliance, and allows more time and resources for achieving results. As we always like to say, “less is more”!

4. Board values are more clear.

Boardroom conversations about Executive Limitations policies lead to values-based decisions, and not the generation of long lists of operational tasks and ideas that might or might not be effective. Instead, the board expresses its values about ethics and the level of risk it is willing to tolerate while the Ends are being achieved, (a process also referred to as “Risk Governance”). Once these values are expressed in written policy, it is easier for staff to not only understand what actions and decisions are off-limits — including unforeseen situations — but also why.

3. Lines of accountability are preserved.

By putting certain means and situations off-limits, accountability for the outcomes of operational decisions more clearly rests with the CEO. Consider the situation if a board were to clearly prescribe or recommend multiple steps and actions the CEO must take. If those steps do not work in achieving the Ends, who is accountable? The board because it prescribed the steps in the first place, or the CEO for following the board’s instructions? Executive Limitations contribute to role clarity, and much less confusion or frustration around who is accountable for what.

2. Staff are empowered.

Working within clearly established boundaries instead of continually asking the board for approval (the “Mother-May-I?” approach) enables much more creative freedom and motivation for staff. Studies have shown that happy, empowered, and creative staff will perform at a much better level than those who are micromanaged or subject to constantly shifting expectations. (See: What Happens When You Empower Employees Rather Than Micromanage Them?).

1. Achieve more results, more quickly.

All of these advantages combined mean that organizations can be more efficient. Ends and Executive Limitations policies work hand-in-hand to ensure that the right results happen inside boundaries set by the board. Instead of having to choose between Results vs. Compliance, boards and organizations that use Policy Governance principles can have both, and save resources at the same time.

What if board members want to give advice?

CEOs can always seek advice from anyone they like, including board members! The distinction that must be respected is the difference between advice and direction. A CEO is free to ignore advice from one or more board members, but they cannot ignore the direction set by the board as a whole.

Board members who only want to provide advice or to act as management consultants for the CEO (as opposed to governing the organization) could find much more satisfaction by resigning from the board and seeking an Advisory Board role or some other position that requires their managerial experience, skills, and expertise.

Lastly, Executive Limitations are just one of four categories of policy used by Policy Governance boards, and the only one with this boundary-setting or “proscriptive” feature. For more information about what Policy Governance principles are and how they work in practice, take the Board EXCELerator, our online board education program.

See also: How to Resolve Operational Concerns, Policy Governance Walkthrough: How to Write a Monitoring Report, Skills Needed for Effective Board Leadership, and Policy Examples.