1. Interpreting the Board Means Policies

Question:  Does the Board need to have written interpretations of Governance Process and Board-Management Linkage policies?

Background: Some believe that since the Board requires written interpretations from the CEO that the Board should do likewise and create written interpretations for all Board means policies.  Others disagree.   Further, if written interpretations are required, is it a whole board effort or purely the CGO’s responsibility to write them?

ANSWER: Policy Governance boards may decide to require that interpretations of Governance Process and Board-Management Delegation policies be written. This is a choice that the model leaves to the board. But since there are far fewer decisions to be made “on the left side of the circle” than on the right, interpretations are normally shared more informally. Interpretations of Governance Process and Board-Management Delegation policies are made by the CGO unless some of the “white space” is delegated to another person or group. Policies describing the CGO role and, if applicable, those of any other direct delegatee (such as a committee) should make this clear. Of course, while board policy-making is the prerogative of the board, interpretations of those policies are always the prerogative of the delegatee. The board itself never interprets its policies except when it chooses to further define them, that is, to actually create a new lower level of policy.

 2. Accountability for Ends When There Is  No CEO

Question:  In an all volunteer organization, who is accountable for Ends production?

Background: This discussion stems from a question around whether small organizations can really do Policy Governance.  The group agreed that the writings indicated, while not ideal, that it was model-consistent for the CEO to also serve in the CEO capacity.  However, the question that then surfaced was whether there needed to be a single point of delegation for Ends production to that CEO.

The discussion recognized that in an all-volunteer organization (no staff) that tasks would be delegated to many.  Yet with whom would the reporting of and accountability for the Ends production lie?  The CEO? The whole Board who would likely be serving in the volunteer operational capacities? 

ANSWER: If a board chooses to designate a CEO, he or she is automatically the single point accountable for both organizational production of ends and organizational avoidance of unacceptable means; otherwise the board has not really created a CEO. The CEO role is defined as the first point below the board granted the authority and held accountable for fulfilling reasonable interpretations of the board’s instructions regarding means limits and ends. If, due to peculiar circumstances, the board charges one person with both CGO and CEO roles, both that person and other board members must keep the roles separate.

In organizations that have no paid staff it is imperative to distinguish between governing volunteers and operational volunteers, even when these different roles are fulfilled by the same person(s). Sometimes a person wears a governing volunteer “hat” and sometimes he or she wears an operational volunteer “hat.” The term “volunteer” contributes nothing to clarifying roles because it signifies only that the incumbent is not paid.

The board has the choice to operate without a CEO at all. If so, it decides ends and unacceptable means, then holds responsible various persons as it chooses. Obviously, accountability is then considerably more difficult to achieve.

3. Leadership Policy

Question: Is it a legitimate response for a Board to create a “Leadership” Executive Limitation?

In situations where the Board does not have the authority to terminate employment of the CEO, clients have expressed a need to state a value around the Board’s leadership expectations to protect the long-term impact of the organization. 

A leadership policy might include language such as:

“The CEO may not cause or allow conditions that create a vacuum in qualified organizational leadership.

Further, the CEO shall not:
   2.2.1   Have fewer than two other executives familiar with board and CEO issues and processes in case of emergency CEO succession.
   2.2.2    Assemble a leadership team without strategic consideration of skills and thinking needed for sustainable organizational leadership. 
   2.2.3    Operate without developing a leadership succession pipeline throughout the organization.
   2.2.4    Operate in a manner that prevents organizational learning. “

ANSWER: Boards that do not have the ability to hire and fire their own CEO are in a position of reduced accountability. Sometimes parent companies place subsidiary boards in this unnecessary position.   However, any board, whether or not it has the ability to hire and terminate its CEO, needs to protect itself from sudden loss of key human resources and threats to the future ability of the organization to perform. A policy such as the one suggested, or the policy included in our sample pack, is an appropriate safeguard.

 

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