A Carver Policy Governance Guide, Implementing Policy Governance and Staying on Track

John Carver, Miriam Mayhew Carver

• Publisher: Jossey-Bass
• Year: 2009
• Print ISBN: 9780470392584
• eBook ISBN: 9780470620137
• Edition: 2
• Topic: Business
• Subtopic: Nonprofit Organizations & Charities
• Index: Business

The Carver Policy Governance Guide series includes six booklets that offer board members a description of John Carver's Policy Governance model of board leadership. Policy Governance enables a board to fulfill its accountability to its organization's "owners, " whether the owners are association members, city residents, company shareholders, or a community of interest. Policy Governance addresses the board's engagement in financial, programmatic, and personnel matters; roles of officers and committees; reporting and evaluation; agendas; and other aspects of the board job.

Implementing Policy Governance and Staying on Track shows boards how they can apply the principles of the Policy Governance model and change the way they govern in practice. The guide cuts across various aspects of the Policy Governance model and challenges board members to move from concepts to practice.

The Policy Governance model is based on the functions rather than the structure of a governing board. It outlines commonsense principles about governing that fit together into an entire system. The practices of the Policy Governance board, which are consistent with the principles, allow it to control without meddling, focus on long-term organizational outputs, powerfully delegate to a CEO and staff, and discharge its fiduciary responsibility in a visionary, strategic manner. Because the model is a total system, the Carver Policy Governance Guide series offers boards a complete set of principles for fulfilling their various obligations.

CARVER GUIDE

“This makes sense! Let’s do it!”

More often than not, board members exposed to a full description of Policy Governance respond by saying that they want to apply the principles and change the way their boards govern. It is gratifying when this happens, but what should the next steps be? What does it take to make the transition from habitual practices to thoughtful principles, particularly when those principles, although rational, are sometimes surprisingly different from what boards are used to?

We don’t want to unduly restrain boards from implementing change, and we have no desire to sound discouraging, but it would be misleading for us to suggest that changing governance systems is a piece of cake. While it is possible to move to Policy Governance quickly (in as few as two to three months), making the change with inadequate learning and preparation can cause disappointment. Inadequately used, Policy Governance cannot live up to its potential of providing boards a path to effective and accountable leadership.

This is why we feel strongly about the most useful ways of implementing Policy Governance and why in this Guide we address the preparation for the change, the change itself, and steps for maintaining the change. We will look at policy writing, agenda preparation, policy manual maintenance, bylaw provisions, board member characteristics, and other real-life issues of governing. Before beginning, here is a brief overview of the model to remind you of its key features.

Policy Governance in a Nutshell

• The board exists to act as the informed voice and agent of the owners, whether they are owners in a legal or moral sense. All owners are stakeholders but not all stakeholders are owners, only those whose position in relation to an organization is equivalent to the position of shareholders in a for-profit corporation.

• The board is accountable to owners that the organization is successful. As such, it is not advisory to staff but an active link in the chain of command. All authority in the staff organization and in components of the board flows from the board.

• The authority of the board is held and used as a body. The board speaks with one voice in that instructions are expressed by the board as a whole. Individual board members have no authority to instruct staff.

• The board defines in writing its expectations about the intended effects to be produced, the intended recipients of those effects, and the intended worth (cost-benefit or priority) of the effects. These are Ends policies. All decisions made about effects, recipients, and worth are ends decisions. All decisions about issues that do not fit the definition of ends are means decisions. Hence in Policy Governance, means are simply not ends.

• The board defines in writing the job results, practices, delegation style, and discipline that make up its own job. These are board means decisions, categorized as Governance Process policies and Board-Management Delegation policies.

• 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.

• The board decides its policies in each category first at the broadest, most inclusive level. It further defines each policy in descending levels of detail until reaching the level of detail at which it is willing to accept any reasonable interpretation by the applicable delegatee of its words thus far. Ends, Executive Limitations, Governance Process, and Board-Management Delegation policies are exhaustive in that they establish control over the entire organization, both board and staff. They replace, at the board level, more traditional documents such as mission statements, strategic plans, and budgets.

• The identification of any delegatee must be unambiguous as to authority and responsibility. No subparts of the board, such as committees or officers, can be given jobs that interfere with, duplicate, or obscure the job given to the CEO.

• More detailed decisions about ends and operational means are delegated to the CEO if there is one. If there is no CEO, the board must delegate to two or more delegatees, avoiding overlapping expectations or causing disclarity about the authority of the various managers. In the case of board means, delegation is to the CGO unless part of the delegation is explicitly directed elsewhere, for example, to a committee. The delegatee has the right to use any reasonable interpretation of the applicable board policies.

• The board must monitor organizational performance against previously stated Ends policies and Executive Limitations policies. Monitoring is only for the purpose of discovering if the organization achieved a reasonable interpretation of these board policies. The board must therefore judge the CEO’s interpretation, rationale for its reasonableness, and the data demonstrating the accomplishment of the interpretation. The ongoing monitoring of the board’s Ends and Executive Limitations policies constitutes the CEO’s performance evaluation.

Step-by-Step to Implementation

Given this review of the Policy Governance model, more completely described in the Carver Policy Governance Guide titled The Policy Governance Model and the Role of the Board Member, let us now turn to the process by which a board can transition to the use of Policy Governance and maintain its new governance excellence. We begin by looking at a sequence of five steps we’ve found most workable for implementation.

Step One: Initial Learning—What’s New and What’s Over

Amazingly, we find that some boards are anxious to omit this stage. They argue that a couple of their members went to a Policy Governance workshop or that a few board members have read some or all of a book on Policy Governance and that therefore the board should proceed directly to the policy-writing stage. We feel so strongly that it is wrong to leap into a change as great as that to Policy Governance without full understanding, that as consultants we will not accept business from such boards. Policy Governance is so different from what boards generally do and requires so much group discipline that to undertake its use before fully understanding it is unwise. We are not arguing that board members must be as expert as Policy Governance consultants, but that they should have at le...

Table of contents

• Praise
• Title Page
• Copyright Page
• CARVER GUIDE
• About the Authors