Not long ago, I served on a nonprofit Policy Governance board. We worked hard to implement the Policy Governance model. We felt good about our written policies and how they were being monitored. However, we needed better linkage with our moral owners. We had a good understanding of who they were, we had a plan and a schedule in place to talk to them. Our first meeting was with a segmented population of our moral owners and the format was a focus group. We planned to have a meaningful dialogue.
“What do you mean I’m a moral owner”? That was the question the participants in our focus group asked us during our introduction of who we were and why we needed their input. We as a board had wrestled with the difference between moral owners, customers and stakeholders so we had a clear idea of who our moral owners were. We had even defined them in our policy. So why weren’t they excited to know who we were and why we considered them moral owners and why we needed their buy-in, their input?
In Policy Governance, the primary relationship of the board is to connect with the owners to understand their values and perspectives. The owners are those on whose behalf the board decides what benefits the organization is to produce, the beneficiaries and what the benefits are worth. Simply, the result for specific recipients at a cost that can be justified.
The board is accountable to the owners and must make decisions on their behalf. Owners can be legal owners, such as an equity corporation, or moral owners, such as in a nonprofit organization. Hmmm…if the owner is not a legal owner, then why should they care if they are a moral owner?
For the same reason nonprofits exist in the first place. Nonprofits exist because communities (local or global) have unmet needs and problems that must be solved. If not solved, they will ultimately impact the community. Those whose values should be taken into consideration, who have a concern about the long-term ability of the nonprofit to impact those needs and problems are considered the moral owners.
For example, suppose an organization exists so that children receive shelter care at a cost that can justify the expenditure of donor dollars and government subsidies. In this example, who are those concerned people who would be moral owners of such a non-profit? Just to name a few: police officers, child protective service workers, judges and attorneys who have to make legal decisions about these children. In fact, anyone in the community who is concerned about children who need such care. Their input is needed by that non-profit board to help it best set direction that is consistent with coordinated care of these children.
The nonprofit Policy Governance board I served on has become skilled in ownership linkage. Their moral owners know who they are and why they are important. They know their voice is helping shape the future. The Policy Governance model guides impact and sustainability for tomorrow.
For more on Ownership Linkage, see our toolkit Connect! A Guide to Ownership Linkage.