Boards, Purpose, and Policy Governance®
- Posted by Rose Mercier
- On July 1, 2020
- Board Leadership, Ends
I read a lot of stuff. Online and print, articles and books, the most recent releases and the not-so-current: governance, strategy, management, culture, measurement, news, technology, music, food, mysteries…you get the idea.
I don’t read everything with the same attention to detail with which I read governance books and articles. Often, I find myself having an internal dialogue about how an author’s ideas relate to Policy Governance® principles – the main preoccupation in my consulting. I’m intrigued by the increasing frequency in my regular reading of the attention being given to concepts such as ownership, accountability, role of the board, the chair’s role in ensuring integrity of board process, or the need to separate management and governance roles. If your board is already using Policy Governance, these ideas sound familiar – right? Not that authors of what I have read reference Policy Governance. I suspect many are not familiar with or, if they are, fully appreciate how in the early 90’s John Carver wove these elements together into an integral system of governance.
Lately, a lot of attention has been focused on the value of, and need for, purpose., The way purpose is defined in an article in the November-December HBR1 sounds a lot like an Ends policy: why the company exists, what value does the company aim to produce, and for whom. I was a bit surprised to see this article emphasizing that it should be the board – not the CEO or executive – that determines the company’s purpose and holds the CEO accountable for its achievement. This role of the board is a given in my Policy Governance world.
Another article about purpose I recently read was about how companies that had defined their purpose were, as a result, able to be relevant and deliver meaningful value.2 How curious – this ‘new’ realization: that being clear about the impact your organization aspires to make and for whom frees the CEO to use a full range of innovative and creative strategies (means) to achieve previously unimagined results. This learning – that when a board sets clear direction and delegates powerfully, it enables the CEO to use the full range of staff abilities – is already known to any board using Policy Governance. (Of course, it always helps when there is research to reinforce lived experience.)
One of my go-back-to reads is John Argenti’s 1993 book, Your Organization: What is it for?3. He exhorted that organizations focus too much on what they do and not on why they exist. He underlined emphatically that it was the board’s, not management’s role to determine why the organization existed. He advocated for a “new” profession of ‘governing’ director and for boards to focus on corporate performance, corporate conduct, and supervising their company’s performance systematically and methodically. Yes, this sounds a lot like the governance produced when a board uses Policy Governance.
Why, I wonder, am I optimistic when I read current articles which feature ideas that align with the principles and concepts of Policy Governance? Perhaps it lies in the hope that the rest of the world will realize the importance of not leaving to chance that the jumble of ideas ‘out there’ will be integrated into a systematic approach to governing. Oh wait – this already exists! Maybe the world is catching up to the brilliance of Policy Governance that John Carver introduced some three decades ago, one piece at a time. The next step is realizing the immense value-added of using all the pieces as an integrated system.
1 Sally Blount and Paul Leinwand. “Why Are We Here?”. Harvard Business Review. November-December, 2019.
2 Thomas W. Malnight, Ivy Buche, and Charles Dhannaraj. “Put Purpose at the Core of Your Strategy”. Harvard Business Review. September-October, 2019.
3 John Argenti. Your Organization: What is it for?. McGraw-Hill International (UK) Limited. 1993.