Expert Coaching. Practical Resources.

March 27, 2018

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Rose Mercier

Is a Mainstream Conversation about Policy Governance® Beginning?

In the last few months I have found myself reading widely from the Harvard Business Review. It seems to have become more “accessible” – cleaner formats, more graphics, and simpler language. I had always liked the wide range of relevant and soundly researched topics. If this sounds like an ad for HBR, it is not. However, in working my way through the latest issue, I discovered the very interesting article[1], “How to be a Good Board Chair.”

On my first read through, I found myself surprised at the degree to which the principles that underlie Policy Governance® permeated this mainstream periodical article. Even without acknowledgement of the similarity, this felt like progress.

Early in the article I read: “…some chairs come to see themselves as the CEO’S boss. Good chairs do not make this mistake…They understand that the board is the collective “boss” of the CEO and the task of the chair is to make sure the board provides the goals, resources, rules, and accountability the CEO needs.” It is not much of a stretch to see in that quote parallels to the following principles:

  • The authority of the board is held and used as a body. The board speaks with one voice in that instructions are expressed by the board as a whole.
  • The board defines in writing its expectations about the intended effects to be produced, the intended recipients of those effects, and the intended worth (cost-benefit or priority) of the effects.
  • The board defines in writing its expectations about the means of the operational organization.
  • The board must monitor organizational performance against previously stated Ends policies and Executive Limitations policies

Later in the article, the following caught my attention: “If the CEO’s boss is the board, the board’s boss is the shareholders…it’s crucial for the chair to act as the board’s agent, not as an individual....” A good chair “wants the board to know as much as possible about the shareholders’ expectations and plans.” Wow! I thought. This captures the essence of the principle of ownership: (The board exists to act as the informed voice and agent of the owners.) It also reinforces that it is the board’s job to seek to understand the perspectives and values of owners, and that it is also the board’s job to translate that understanding, enhanced by its own wisdom, into policies that direct the CEO.

After my initial elation at discovering so many echoes of Policy Governance in the article, I started having second thoughts.

After all, anyone who understands Policy Governance as a coherent system of principles did not need this article to know that the only logical role of the chair is one of leading a group of equals to define and demand successful execution of organizational performance. It remains somewhat satisfying that this research confirms through trial and error, that others, in 31 countries no less, have reached conclusions and implemented practices consistent with at least some of the principles of Policy Governance. Less satisfying, however, is the worry that such research reinforces a premise that good governance is the result of adopting a collection of best practices derived from studies of individual boards (and chairs). One could arrive at the same understanding of the chair’s role using a logically conceived and coherent system of governance and then implementing practices that fit that role.

And so, I am left to ponder. Do I see the proverbial half-empty glass of the pessimist? Here is governance research arriving at findings with obvious parallels to Policy Governance seemingly without knowing it? Or, do I adopt the optimist’s view? Here is credible, current, and mainstream literature confirming ideas that mirror Policy Governance principles, and as result Policy Governance is one step closer to being part of the mainstream conversation about effective governance?

Now if there were only a way to bring that to HBR’s attention. Dear Editor…

 

[1] Stanislav Sheksina, “How to be a Good Board Chair”. Harvard Business Review, Mar-Apr 2018, pp. 96-105. The article relates the findings of the INSEAD’s Corporate Governance Center’s research project that included a survey of 200 board chairs from 31 countries, 80 interviews with board chairs, shareholders and CEOs.

 

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