Frequently boards that are implementing Policy Governance® find that the general public does not understand what they are doing, Sometimes they think that the Board is 'abdicating' its responsibility by using Policy Governance. This article was written to assist boards in explaining the basic concepts of Policy Governance to members of the public who have no background at all in the model. It does not try to address every nuance, but to explain in broad terms how the model works.
Policy Governance is a model which allows a board, on behalf of the people it represents, to ensure that an organization achieves what it should and avoids what is unacceptable. Let's take a simple example to show how it works. In this example, you and four other people, on behalf of your extended family (in this example you will be "the Board") are responsible for organizing a dinner for a birthday or anniversary celebration. The five of you live in different towns, and the location for the celebration is in yet another city. You decide that the best thing to do is to hire a chef (who in this example will be the Chief Executive Officer) to handle preparation and serving of the dinner. So you check out the qualifications of chefs in the area, and hire the best one you can. However, you will need to provide the chef with some directions.
The five of you sit down together and make some decisions. What will the menu include? Who will be on the guest list? How much do we have to spend on the dinner? These are "board" decisions. They are the determination of what benefits or results are expected, who those results are for, and how much they are worth. In Policy Governance language, these things are referred to as the "Ends." In making those decisions, you will have to gather some information. Are the majority of guests "meat and potatoes" types, or would they prefer a more exotic menu? Are there a lot of children, who might require a different menu? Do you have a lot of older guests who would prefer to be served, or is buffet-style better?
After gathering your information, you come up with the following set of desired results (Ends) for the Chef to produce:
"We would like a tasty buffet dinner for one hundred people. The menu must include roast beef and potatoes, with at least one other main course option. There must be at least three choices of dessert, one of which must be low fat. There will be a few guests who have physical limitations, who must be served rather than go through the buffet line. The total cost of the dinner shall not exceed $2500.00."
The above statement tells the Chef (CEO) what results you expect. You have provided clarity in your instructions. You have specified areas where the chef's choices are limited (e.g., there must be roast beef). Where you have not provided further specification, the chef is free to make any reasonable interpretation of what you have said. (He can serve mashed potatoes, scalloped potatoes, baked potatoes, etc., since you did not choose to specify the style.) He can hire assistants to help prepare or serve the meal, as long as the total cost does not exceed your specifications.
Now, you have told the Chef what you want. Do you:
a) go away and never talk to him again until the dinner is served?
b) hang around the kitchen and look over his shoulder, suggesting that he add a little more salt to the soup?
c) Neither of the above?
The correct answer is (c). You (as the Board) still have two more things to do. First, you need to let the Chef know if there are any things that he may not do in the preparation of this dinner. While you do not want to interfere unnecessarily with his creative abilities and his professional training, there are certain methods that you may not find acceptable. The Chef needs to know about these in advance. Second, you need to decide how often you will check up to be sure that preparations are on track and consistent with your expectations.
What may the Chef not do? In Policy Governance language, these are called the "Executive Limitations." The five of you (the Board) may not all have the same idea about these things, but the Chef can't work for five different bosses, so the group of you will have to sit down together and come to an agreement about what values you have. Let's assume that you have done this. First, you decide that you don't want any artificial additives and preservatives used in the meal. Then you discuss the fact that giving a dinner could leave you open to liability if someone gets food poisoning, so you tell the Chef that he must not fail to meet all public health standards regarding the preparation and preservation of the food. You also do not want to get in trouble with the law, so you tell the Chef that he must not fail to obtain the necessary permits for serving alcohol. Finally, you decide that you would like to support local businesses in this venture, so you tell the Chef that he must not buy major ingredients from outside the local trading area.
Your last task is to decide how often to check up on, or "monitor" the Chef. You decide that two weeks before the dinner, you would like to see the menu plan, so that you can assure yourself that it meets the criteria you previously specified. You might ask whether the necessary public health and liquor permits have been obtained, or even ask to see them. You might ask for verification that the food was ordered locally, or even ask to see the invoices. For each area where you identified an expectation, you (as the Board) have a right, and indeed an obligation, to assure yourself that your expectations are being met. However, this does not mean that you will stand around the kitchen and offer "helpful advice" during the preparation of the food. You hired a professional, you set the expectations, you monitor results, but you let the professional do his job. Everyone knows that "too many cooks spoil the broth."
As the Board, you have as much control as you need over the results. You decide what the results should be, for whom they should be, and how much they should cost. You allow the Chef, who is the professional, to make the decisions about "how to" achieve the results, except to specify clearly that certain methods are not acceptable. This approach is not abdication of responsibility. Indeed, it is rigorous and planned control over the things that are important to you as a Board.
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