Frequently Asked Questions about Policy Governance®
Policy Governance® is a significant alteration in the way boards operate and govern. Alteration of any nature can result in misconceptions, misunderstandings and even confusion. When that happens, the potential of the alteration may not be realized. These Frequently Asked Questions are intended to address some of the misconceptions, misunderstandings and confusion that have arisen about Policy Governance.
Our intention with these FAQs is not to convince you of the merits of Policy Governance or to convince you to use it. Instead, we offer to clarify the misconceptions that exist and let you choose what your next action may be. These FAQ responses are based solely on the principles of Policy Governance, succinctly stated in the Policy Governance Source Document created by IPGA and approved by John and Miriam Carver.
To get full value for yourself in reading these FAQs, we recommend that you begin by reading the Policy Governance Source Document. Many of the answers to the FAQs will refer to or use material in the Source Document.
After reading these FAQs in their entirety or in part, you may have questions that were not fully answered, other questions or concerns we did not address or just want to communicate with us for any other reason. If so, please contact us at email@example.com. We promise a timely response.
FAQ 1: What is Policy Governance?
Briefly put, Policy Governance is a principle-based operating system for governing. The Policy Governance Source Document provides a complete answer to this question. Please read this document if you have not already done so.
FAQ 2: Why would a board want to use Policy Governance? What is the value that Policy Governance provides?
Policy Governance enables accountable board leadership.
Governing boards are accountable for an organization?s performance, that whatever is intended is fulfilled. Governing boards do not exist to support staff nor be staff advisors. Policy Governance is specifically designed as the framework within which governing boards can fulfill their accountability.
Organizational performance is defined by the difference an organization makes in the world (see Ends Policies, principle 4 in the Source Document) as well as the ethics and prudence used in making that difference (see Executive Limitation Policies, principle 6 in the Source Document). This definition and monitoring its fulfillment (see Monitoring: principle 10 in the Source Document) allows for boards to be accountable to the organization's owners (see Ownership, principle 1 in the Source Document) and to the appropriate public and private authorities.
Additionally with Policy Governance, the roles of board and management and the board/management relationship are clearly distinguished. This clarity allows the board to be accountable without infringing unnecessarily on the creativity and responsibilities of management.
FAQ 3: Can Policy Governance be used with boards of any size?
Yes it can! As noted in the Source Document, under What Policy Governance is NOT, Policy Governance does not dictate board size. As such, its use is not limited to boards of any particular size or range.
However, the larger the board, the greater is the challenge of managing the principle of board holism (see Board Holism, principle 3 in the Source Document). Some boards may wish to clarify why a larger board is still needed against the cost of any increased discipline that may be needed to ensure that board holism is maintained.
FAQ 4: Organizations come in many sizes, ranging from very small (no staff) to very large. How can Policy Governance possibly work for all organizations, regardless of size?
Policy Governance is a set of comprehensive integrated principles for governing. These principles fully apply to the governance of all organizations, regardless of organizational size or purpose. All organizations have a purpose and make a multitude of decisions on a daily basis in achieving that purpose. Their decisions and the actions they lead to are not made or taken arbitrarily. They are guided by the values an organization has deemed important, values that may be either explicitly stated or exist as unspoken and underlying.
In Policy Governance, these organizational values are explicitly stated and documented in policy as Ends Policies, Executive Limitation Policies, and Board Means Policies (principles 4, 6 and 5 of the Source Document).
The board creates these policies, delegating the achievement of its Ends within the boundaries stated in its Executive Limitation policies to staff. For most organizations, large or small, this delegation is usually made to the chief executive officer of an organization (see Delegation to Management, principle 8 in the Source Document). In the event an organization has no staff and the board is functioning as board and staff, the values important to the organization still guide the achievement of all the board?s work regardless of the role it is filling at any moment. In this case, the board will need to recognize when it is doing board work and be guided by the board?s means policies, and when they are doing staff work and be guided by the Ends and Executive Limitations policies. The IPGA board successfully operated this way during the organization?s first year of operation and can provide guidance in these situations.
So, regardless of organizational size and purpose, effective governance is required. Policy Governance is the framework within which effective governance is provided and put into practice.
FAQ 5: Does Policy Governance restrict board members from communicating with staff?
No. Policy Governance does not limit human interaction (Source Document, statement 4 in What Policy Governance is Not).
However, when board members do communicate with staff, they must be responsible to respect and honor the chief executive officer?s authority as described in Delegation to Management (see principle 8 in the Source Document). When the board delegates operational performance, as stated in Ends and Executive Limitation Policies (see principles 4 and 6 in the Source Document), to the chief executive officer (CEO), that person is designated as the board's sole link to management and has the full authority over and accountability for all management activities, including those of staff. Any action taken by a board member or the board as a whole to instruct or evaluate staff would be infringing upon the CEO's authority, limiting the CEO's ability to perform his/her job and possibly impacting current and/or future organizational performance. (Note: When using Policy Governance, individual board members have no authority to instruct and evaluate staff. Board authority rests with the board as a whole and not with any individual board member (see Board Holism, principle 3 in the Source Document.)
Board members, when talking with staff, must always be cognizant of this line of authority. In doing so, they can freely interact with anyone about anything at anytime.
FAQ 6: Why does Policy Governance use 'negative' language in the Executive Limitation Policies?
Policy Governance uses negative or limiting language to maximize staff's authority to create and make decisions in pursuit of the Ends.
As noted in Executive Limitations Policies (see principle 6 in the Source Document), "The board makes decisions with respect to staff means decisions and actions only in a proscriptive way ...". That is, the board by proscribing, is limiting or constraining certain actions and behaviors which then makes possible all other actions and behaviors. This proscription gives staff maximum freedom in creating actions to achieve the Ends, while avoiding what is not acceptable even if it works.
If the board were to use positive or prescriptive language, staff would be limited to following the board's direction and seeking board approval for any action that was not consistent with the board's prescribed direction.
FAQ 7: Legislation requires our board to do certain things that Policy Governance boards don't normally do, such as hire and fire staff other than the CEO. Can Policy Governance work for our board?
Yes! Policy Governance can work for your board. Policy Governance boards already are accountable for the hiring and firing of staff but have delegated the responsibility for performing this job to the CEO. What initially may occur as problematic because the legislation states that boards have this responsibility can be addressed relatively simply through the board?s existing policy framework and the use of the required approvals/consent agenda.
In general, whenever legislation imposes requirements on a board or organization, the board should familiarize itself with the intent and content of the legislation. Then it should review its existing policies to see if they adequately address the intent and any concerns that were stated in or implied by the legislation. Once the board has discussed the law and made any changes to policy that it deems appropriate, the board can usually use the required approvals/consent agenda to fulfill on the specific responsibility the legislation has given to boards.
For example, in the above example of hiring and firing staff, Policy Governance boards delegate this to the chief executive officer (CEO). After reviewing the legislation and updating policies if needed, the board can satisfy its legislative responsibilities by using the required approvals/consent agenda to give formal approval to the CEO?s action. As information for this required approvals/consent agenda item, the CEO would submit, in advance of the board meeting, a ?special? monitoring report demonstrating compliance with all policy statements relevant to his/her actions. If the board is satisfied that there is compliance with its policies, the board would make a statement of approval to satisfy the regulation.
The above approach can be applied whenever requirements are placed on a board by any authoritative outside body or organization.
Policy Governance does not constrain a board from doing what it is legally required to do. By the same token, demands by outside authorities for board actions inconsistent with the principles of Policy Governance do not require a board to compromise its use of Policy Governance.
FAQ 8: Many experienced people believe that the best way to plan for the future of an organization is for the board and staff to collaborate and jointly create a strategic plan. How is this possible with Policy Governance?
As stated earlier in FAQ 2, Policy Governance enables accountable board leadership! Board accountability is critical for an organization to maximize organizational performance and must not be compromised while assuring the necessary strategic planning for an organization is performed.
With Policy Governance, board and staff do work together to assure the strategic planning critical to the future for their organization occurs, but they do so within their own unique areas of authority. One role the board assumes is defining the difference an organization is to make in the world. The board does this by creating Ends Policies (see principle 4 in the Source Document). The board states Ends, getting more specific at each level, and delegates further interpretation and accomplishment of these Ends to the CEO. Within the CEO?s authority, he/she would likely use a process of strategic planning to plan for the accomplishment of Ends.The advantage of separating the creation of Ends policies, on which the strategic plan is based, from the rest of strategic planning, is the clear distinction of roles and lines of accountability that are created. By succinctly stating the difference an organization is to make and clearly delegating its fulfillment to the CEO, the board has defined a major piece of the work of the CEO. The CEO knows what will be required to demonstrate successful job performance, and the board knows what it must monitor to evaluate CEO job performance. When board and staff are jointly involved in creating a plan, the lines of accountability between board and staff can easily become blurred and ultimately, organizational performance may be impacted.It's important to note that the board engages in strategic thinking when it creates Ends Policies. The board may likely engage staff and CEO input in helping to shape the impacts of various values choices. The critical point is that Ends Policies are the board?s work, the board?s decision, the board?s contribution to long-term organizational strategy.
When the board does its work at this level, a second advantage is that the CEO is now free to creatively use his or her skills to create the strategic plan needed to achieve the Ends. In doing so, he/she would utilize any or all of the skilled resources available, including any that may exist with any board member. However, observing the lines of authority stated by the board, any board member being a resource to the CEO would be working for the CEO, outside of his/her role as a board member, and as with any resource, the CEO is free to use or not use his/her counsel. (Note: Under Policy Governance, individual board members have no authority to direct or evaluate staff. Board authority rests with the board as a whole and not with any individual board member -- see Board Holism, principle 3 in the Source Document.)
Boards of directors are accountable for organizational performance. When lines of authority are clearly defined and responsibly observed, board intent is effectively translated into plans that give rise to actions that will produce results that reflect the intent.