The Role of Governance

Governing with Policy Governance is about creating a different future — it is not about telling people what to do. It is a leadership role and it requires holding others accountable for achieving results. This article is about doing the job of governing. It describes the elements of the job that should command the time of the board but it does not talk about how the tasks are accomplished. [click the title if you don’t see the rest of the article…]

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Why was your not-for-profit organization created?

Every incorporated society was formed to fill a need in the community. Your job of governing is to see to it that that need is fulfilled.

One of the wonderful features of being homo sapiens is that we have the ability to imagine a future that does not exist, and we have the mental, physical, and organizational tools to change our world to fulfill our dreams. All of the works of our civilization began as expressions of human creativity.

Your society was incorporated because some people recognized that without it, something was missing in your community. Your work on the board is essentially creative. You must imagine how your community will be different as a result of your organization, and articulate that with sufficient clarity that others can formulate the strategy to fulfill that vision.

Let me be specific about the four features of your society that relate to the job of the board.

  1. Your organization is there to provide a benefit, a result, or a change in your community.
  2. Whatever the benefit, change, or results of your organization, some people will be better off as a consequence.
  3. In order to achieve the work of the organization, some resources will be consumed. There is an expense that may or may not be valued as money.
  4. There is a segment of the community who would have your organization exist to produced the benefits, results or change.

With Policy Governance, the board attends to these features. Specifically, this is what the board accomplishes (the job of the board):

  1. In policy, the board articulates the benefits, results or changes that are required by the organization.
  2. The board holds the staff accountable for: (1) achieving the benefits, results or changes, (2) for seeing to it that those results benefit the appropriate people, and (3) that the cost of the benefit is appropriate.
  3. The board holds the staff accountable for not taking any actions that are inappropriate, or imprudent, or deviate substantially from achieving the benefits, results or changes.
  4. The board recognizes, in words, what segment of the community would have this organization exist.
  5. The board holds itself accountable for ensuring that the benefits, results or changes that it is requiring of the organization, are those that the segment of the community who would have the organization exist would demand of it.
  6. The board hires the head-of-staff, and agrees to hold that person accountable for the cumulative work of the staff.

I know that is a bit wordy, but at this point our language does not have simple phrases to express the role of governance.

Board members may volunteer to do many other things as part of the responsibility of being on the board, but in the case of a Policy Governance board, this is the primary job.

What follows is a brief description of how the board uses its governing time to addend to each of the 6 jobs of governance.

#6 – Holding the head-of-staff accountable
The board uses normal hiring practices to find and hire the leader of the staff.

In policy, the board agrees to hold this person accountable for all of the work of the staff. Drafting these policies does not take much time because the wording has been established by other Policy Governance boards. Boards have to learn to stick to these policies and not to meddle in the affairs of staff.

#5 – Attending to the ownership
In my opinion, the weakest part of Policy Governance is the fact that the board must hold itself accountable for knowing and communicating with the segment of the community for whom it governs — its ‘ownership.’ There is no one way or obvious method to accomplish this. Nevertheless, the board must come to know that it is truly creating what the ownership wishes. This will take some of the time and resources of the board.

#4 – Describing the ownership
In the case of a for-profit organization, it is clear that the board acts on behalf of the shareholders. One of the conceptual breakthroughs by John Carver as he formulated Policy Governance was that the board would have to define its moral ownership. In policy, the board describes the segment of the community for whom it speaks. Thereafter, the board’s entire authority to command the results of the organization comes from its understanding of what that segment would have the staff produce. A board’s wisdom arises from its knowledge of its owners, not from the individual vision of the board members. This job is probably done once when the initial set of policies is written. The board should re-examine the policy annually. Although the policy may be referenced frequently, crafting it takes very little ongoing time of the board.

#2 & #3 – Monitoring
With Policy Governance, the board does not tell the staff how to do its job. Regarding the methods of the staff, the board expresses in policy what behavior is not permitted by the staff. This is very liberating for the staff because they know that if they don’t violate the board’s policies, they have 100% freedom to act and to be creative in formulating strategy. Since many board members have considerable experience with strategy, I frequently see boards trying to to take a hand in directing staff actions. This area of policy, called Executive Limitations, requires little annual attention once the policies are in place. Since most of these policies deal with ethics and prudence, when writing these policies, boards can be guided by the experience and words of countless boards that have been using Policy Governance for years. This takes considerable attention when formulating the first set of policies.

In the case of both the Executive Limitation policies, plus the policies relating to the benefits, results and changes, the board holds the staff accountable by receiving detailed written monitoring reports.

These monitoring reports are prepared in advance of a meeting by the staff or a consultant (usually not the board). The time that board members spend on these reports is a couple of hours in private study before the meeting. Unless something is amiss and requires board action, the time spent in the meeting recognizing that the board has read the monitoring reports is only a couple of minutes.

#1 – Articulating Ends
The board must produce the words that describe the benefits, results or changes that are required. It should also describe those for whom the benefit are intended.

These are words-of-power, called Ends, that will cause a transformation in the community.

As the staff produces the Ends, resources will be consumed. Your organization will take value from the community to create value. John Carver says that this is, “a value for value swap.” The board’s policies must ensure that the value created by your organization exceeds the value consumed.

Although describing Ends is at the core of governance, people find this very hard to do. Often they want to tell the staff what to do (what actions to take), but cannot see what result is required. Attending to the quality of the Ends is the primary job of the board.

* * * * *

This is the role and job of governance when using Policy Governance. In summary, the board ensures the results by describing the results in policy, and then holds the staff accountable by rigorously monitoring its policies.

What happens when the staff cannot produce the results demanded by the board’s policies? The simple answer is: the board must either change its policies or it must change the persons accountable for achieving the results.

© 2007 R. Ballantyne. All rights reserved. This is for your use at your computer screen. For reproduction of any kind you will need the written permission of the author.

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