Small society – perhaps the staff is not paid

At this site there are many references to the board, the staff and sometimes to the lofty title of the CEO. Many organizations cannot afford any staff or have only a few employees — none of whom could be described as a CEO. Should organizations like this use Policy Governance? [If you cannot see the rest of this article, click on the title… ]

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In my opinion, Policy Governance (PG) provides a board with the best possible means for governing a corporate entity. It is also the only complete model for governance. Boards that follow the principles will know that the board members are doing their job with high integrity and transparency.

  • What is the special significance of the corporate entity, and later in this article,
  • is Policy Governance right for your group?

First, about the power of a corporate entity: your entity can own property, investments, manage bank accounts and employ an army of people. It can even be international in the scope of its work. There is no limit to the resources your incorporated society can accumulate to accomplish your Ends.

Our governments permit us to set up these entities. This is a special privilege that can allow us to effect tremendous community transformations. The corporation’s resources can be focused on curing disease, building a civic concert hall, protecting the environment, lobbying for justice, celebrating a culture, ending a famine, etc. (They can also be dedicated to increasing shareholder value. While PG is used by for-profit boards, this is not the focus of this article.)

Ensuring that the appropriate resources are assembled and then wisely used is part the job of the board. Since the work is always about a beneficial transformation of our communities, this should be seen as a large responsibility. The amount of that responsibility is not a reflection of the size of the organization, but the significance of the community’s need for the benefits of the organization.

The reason that I found and studied PG in the first place was that I learned that it provided the only complete model for a board to govern with integrity and transparency. I believe that the discipline of PG would serve boards of all large corporate entities.

The question that I’m often asked is: what about our tiny organization, do we need Policy Governance?

Perhaps, perhaps not. It depends on:

  • the size of your operation,
  • the importance of governing with transparency and integrity,
  • who is accountable for results, and
  • how your organization is expect to grow.

If the organization is so small that the board and the staff are just a group of friends, the idea that one group needs to govern the other group may seem silly. The effort to develop a full suite of PG policies, and require monitoring, might be an unnecessary burden. This is not the time to implement PG.

A small group might still find some utility in creating a set of Ends for the organization. The PG concepts of (1) expressing the benefits, (2) describing those who will benefit, and (3) clarifying what those benefits are worth — and then articulating them hierarchically — can be very useful for ensuring that the community knows what it can expect of your organization. Frankly, once you have learned to use the language of Ends, the words of mission and vision statements may seem inadequate.

At what point, if ever, in the life-cycle of an organization should the board consider using PG? The point occurs when you realize that there needs to be a clear division between those who govern and those who do the work. You will know the time is right because it is possible for the board to represent the community’s need and that group (the board) is prepared to hold the doers accountable for meeting the need.

Until this point, probably the whole group has been one happy family. In many cases, some or all of the people who are on the board are also expected to do some of the work. You may hear these people describe the function of the board as a working board. I have read articles which suggest that a working board represents a model of governance. It does not. Frankly, it will result in a very weak form of governance. And, in your case it may not matter. If your society is accomplishing what it should, and the role of the board is ceremonial, or a useful think-tank, why change it?

It is unfortunate (and a misconception) that many people equate the role of governance with power. Another misconception is equating accountability with blame. This results in people wanting to be on boards so that they can have the power; and because the doers are accountable to the board, they will carry the blame when things go wrong. My hope is, that as you read through these essays, you will come to realize that although the words of the board can be very powerful, the role of governance is that of a servant-leader. It is not about power, it about recognizing and addressing the community’s need.

The general rule is that, in an organization, it is difficult for someone to be accountable to him or herself. If you are on the board, it is a conflict-of-interest if you are also accountable to that board for producing results. If you sense that your board is just rubber-stamping the work of the rest of the organization, or it is careful not to require your group to address certain community needs because the people working for you (volunteer or paid) do not have the capacity to address that need, you may be realizing that the board has a conflict-of-interest; and it is time to make it into a truly governing body. Now you are ready to implement PG.

If your whole organization is one big committee, but you plan to grow, consider splitting the role governance from the management and operations. At this point, create a small board (five people on the board will work well). If this board were to use PG, I think that you would be pleased with the clarity and transparency this will bring to your organization. Expect that since this has never been done for your society, and since everyone will have their own vision of what the organization is really about, agreeing on your Ends will be a struggle.

PG literature assumes that there is a Chief Executive Officer (CEO) who has the cumulative responsibility for the results of the organization, and who is the only person who is held accountable by the board. What if you cannot afford to hire someone in this capacity? The issue is that the board needs to be able to hold someone accountable. That person might be the current chair of a management committee. It would work even if everyone on that committee were a volunteer.

If you are considering PG, but are not sure if it is for you, you might explore the concept by writing a full set of policies. This will take some study as well as the time to work through all of the policies. Consider doing all of this with the full board. The text book to guide you is Reinventing Your Board, by John and Miriam Carver. When you have developed your first Policy Book, you will probably have explored enough of PG to decide if this is the direction you want to take.

© 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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