When it comes to losing weight, I have listened to enough advice, watched too many infomercials, researched a dozen diets, bought a pharmacy worth of pills and if I had all the money I spent on fitness fees I could have bought a gym. All these have met with minimal success. But I digress.
Many organizations have initiated the use of Policy Governance® with limited success. As a trained Policy Governance consultant I’d like to tell you that the challenge is in finding the right consultant – and I am the one. However my experience is that consultants get too much credit for success and too much blame for failure. While having a competent and experienced consultant to walk your organization through the implementation process is vital, it is not the greatest challenge to success.
There are ten basic principles that serve as the foundation for Policy Governance, which suggests that it is not overly complicated. However, like those easy-to-assemble, no-special-tools required items we have purchased, it is essential that you use all ten pieces and don’t arbitrarily decide that one or two of the pieces aren’t important. Just because you don’t think it is necessary, doesn’t mean it isn’t; it’s likely there for a reason. The Policy Governance pieces are sequential and integrated - and they make sense.
Policy Governance is not ambiguous. Once a board gets its collective head around the idea of Ends and Means, there is not a lot (read not any) room for ambiguity. Ends describe the end results for the identified recipients and the attending cost-benefit. Ends are the out there; they will be or they will have rather than the programmatic we will do or we will provide. The concept of Ends is not the Policy Governance term for a mission statement. If the mission statement of your organization contains “we” words, it will invariably summarize the Means of your organization, rather than its Ends.
Once you have the idea of Ends locked in, the concept of Means will be easy to grasp: it is simply anything that is not an End. Items such as programs, budgets, strategic plans and HR are all Means which are used directly or indirectly to see that the Ends are accomplished. There is no overlap between Ends and Means; it is either one or the other. We won’t confuse Ends with being the high level important stuff and Means as the menial details and then have to figure out what is important.
A second area where Policy Governance removes any ambiguity is the role of the board in relation to the role of the CEO. The board establishes policies based on its values. These policies will include how it does its job, including how it relates to the CEO. It will clearly state its Ends and then limit the Means which are unacceptable for the CEO to use. The board will do this in its Executive Limitation policies.
A third area of clarity in the Policy Governance model is the understanding of authority. Someone or a body (often called a board) has the responsibility and authority to make sure the organization accomplishes the right results for the right people at the right cost and does so legally, ethically and prudently. This is a concept we are used to. I own my house so I get to decide paint colors and plant locations. (Actually my wife has both the authority and the expertise, but you get my point.) I get to decide who comes into my house and who I keep out. I am also the one who will be sued if someone slips on an icy sidewalk or trips on a broken step. In the same way a board has the authority and the responsibility for the successful, legal, prudent and ethical running of an organization.
Policy Governance is unmistakably clear about delegation. The board states it policies at the broadest level and then adds clarity until it is satisfied that any reasonable interpretation of the policy will be acceptable. It is through these policies that it delegates its authority to the CEO. The CEO will know precisely what the expectations are in terms of organizational accomplishments any Means the board would find unacceptable even if the Ends were accomplished.
So if there is minimal complexity and virtually no ambiguity it would seem the implementation of Policy Governance should be rather easy. This brings us back to our original question: what is the greatest challenge a board will face.
The answer is the same as the challenge to losing weight. Discipline!
If we understand resiliency as the capacity of a body (like a board), when it is bent out of shape to go back to its original shape, boards epitomize resiliency.
One of the ways a board will “bounce back” is by dipping back into Means. It understood that the CEO was responsible for any Means used except the ones prohibited by the board. However having been bent that way, if it does not tenaciously exercise self-discipline, it will find itself insidiously talking about Means. “Before you hired that new department head, did you look at any internal candidates?” The implicate message is that the board member asking the question thought a certain internal individual would have been a suitable candidate. “I noticed in the budget that you have significantly increased the cost of marketing. Based on where we are as an organization, are you sure that would be money well spent?” That question sounds ominously rhetorical. It will likely be (and rightfully) interpreted by the CEO as I can’t believe you would spend this much money on marketing.
Another way it demonstrates its resilience is by looking at any important organizational issue as an End. Surely nothing is more important to the success of an organization than the development of a good strategic plan and as such a strategic plan must be an End. With that in mind it goes on a two day retreat to develop its strategic plan for the next three years. It has now moved from defining what results the organization needs to produce to how those results will be produced. By this time it has wandered off the governance road and into the operational pasture. The only question left to be answered is how far it will drive into the pasture before it gets hung up.
Policy Governance aficionados can bend the opposite way. It’s easy; Ends are the responsibility of the board and Means are the responsibility of the CEO. This is a new way for the board to abdicate its responsibility. A Policy Governance board needs to be concerned about Means; just not the way it used to be. It needs to prohibit any Means that could be used that would be unacceptable, even if it worked.
The importance of regular and rigorous monitoring is critical. If a board offers tacit or casual acceptance of a monitoring report, it has just demonstrated a lack of self-discipline. We’re supposed to get monitoring reports and we’re getting them, so we’re doing Policy Governance, is not Policy Governance. It requires discipline on the part of each member of the board to carefully review a Monitoring Report prior to a board meeting.
You want to make sure the CEO has the right policy. Sometimes after a board has changed a policy, the CEO will cut and paste the old policy and provide a Monitoring Report using that outdated policy.
Self-discipline includes looking carefully at a report to make sure the data addresses the policy. Sometimes data is incomplete or extraneous.
Discipline is also required to carefully look at an interpretation to see if it is reasonable, Reasonable doesn’t mean it is the way you would have interpreted the policy or reflects your personal preference; only that a reasonable person could interpret it that way. Policies are not bread crumbs intended to lead the CEO to the destination the board wants. They are clearly worded instructions which will allow the board to accept any reasonable interpretation.
These are a few examples of how boards need to exercise self-discipline. We could talk about the need for a board to speak as one or the discipline required to regularly and intentionally connect with its owners.
So you want to implement Policy Governance? It’s not complicated, it’s not ambiguous and you don’t need the ongoing services of a personal trainer. Your diligent self-discipline will keep you healthy and ensure you aren’t carrying any excess governance flab.
The source document for Policy Governance® can be found
at www.carvergovernance.com
