“Here’s why our board doesn’t use Policy Governance®.”
- It’s “one size fits all”
- It gives too much power to the CEO
- It only works in big organizations
- You can’t have committees
- It prescribes structures and size
- It’s too rigid
- Board members can’t talk to staff
- Directors can’t fulfill their fiduciary duty unless they approve the budget, the strategic plan, etc.
- We tried it before and it didn’t work
I have heard all of the above more than once. This type of “myth-information” can cause boards to miss out on the opportunity to unambiguously state the performance they expect of their organization. They’ll miss the assurance that the organization they care about is actually making a difference in the world without compromising values of ethical, prudent conduct. Boards “myth” out, often without exploring whether or not their stated assessment of Policy Governance is well-founded.
Let’s quickly test each of these statements.
It’s “one size fits all.” False….Policy Governance can be tailored to any type of organization – corporate, non-profit, or public agency. The key lies in appropriate tailoring. I work with two foundations; one very, very large with hundreds of staff and broad mandate and another very, very small with one staff person and a fairly narrow mandate. Both successfully utilize Policy Governance to achieve excellence in governance. As do boards of national and provincial associations, health regions, hospitals, colleges, schools, public utilities, professional associations, trade associations, small and large voluntary agencies, churches and missions organizations, tourism agencies, cooperatives, credit unions, Aboriginal groups, and so on…
It gives too much power to the CEO. False…Curiously, many organizations come to Policy Governance to re-balance the ‘power’ between the CEO and the board. In Policy Governance, the board specifies results, determines boundaries of action and safely delegates authority within these parameters because it systematically holds the CEO to account by rigorously assessing her (organizational) performance. The CEO has only as much authority as the board chooses to delegate.
It only works in big organizations. False…See ”one size fits all.” Let me add this: it only works in organizations of any size where the board is willing to exercise discipline and take the time to learn how to apply a system of governing that helps it achieve excellence in its role.
You can’t have committees. False…However, board committees help the board do its jobs but don’t help staff do jobs that the board has previously delegated to staff.
It prescribes structures and size. False…See ”one size fits all.” It is possible to work with all types of organizations in any sector. Have a subsidiary corporation? Have both elected board and elected staff? Function as both a regulatory college and professional member association? It is (and has been) possible to enjoy the benefits of Policy Governance.
It’s too rigid. False…See answers for ”one size fits all,” ”you can’t have committees,” and ”prescribes structures and size.” Policy Governance does ask the board to be disciplined in how it works. But discipline is necessary to accomplish anything of worth.
Board members can’t talk to staff. False…Policy Governance asks boards to respect a principle of providing direction, as a whole, only to the CEO. But talking, asking about activities, offering suggestions, are all possible just as long as individual directors respect that they have no authority to provide direction to any staff member.
I don’t think Directors fulfill their fiduciary duty. False…There are two or three excellent articles that speak to the ways in which Policy Governance ensures the exercise of fiduciary duty. Download the January 2015 edition of REALBoard Advisor in which Joseph Inskeep discusses this topic in depth.
We tried it before and it didn’t work. Well, this may be true…However, our experience is that boards sometimes “sample” Policy Governance, or apply only some of the principles, get stuck and don’t stick with it or ask for help. In the same way that you don’t usually try changing or fixing the operating system in your computer without technical assistance, changing or fixing your governance system is best done with the assistance of the user manuals and coaches that are available to you. Policy Governance works if you apply all of the principles correctly.
You don’t need to take my word for any of the above. There is living proof that your board need not be limited by believing this myth-information. The proof exists in the boards of all types who use Policy Governance to produce brilliant results for those on whose behalf they govern. Don’t ‘myth’ out on the opportunity to be a brilliant board.