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Policy-based Governance: If It's So Great, Why Isn't Everyone Using It?

We love to have choices. We want choices in our breakfast cereals, in our cars and in our window shade colours. We want choices in how we run our organizations and boards as well. Policy-based governance is one choice of how to run a board that has broad acceptance by lots of Boards . . . but why don't more Boards use it?

The policy-based governance that I'm referring to includes John Carver's Policy Governance^®. He defines Policy Governance^® as:

"the world's only complete, universal theory of governance - a conceptually coherent paradigm or principles and concepts (not of structure). The model enables boards - as 'servant-leaders' of shareholders, public, members (or other "ownership" equivalent) - to ensure that organizations achieve board-stated goals and conduct themselves with probity". 

Others of us just refer to directing the organization with policies and a general separation of what happens in the operations part of an organization compared to what happens at the board table.

Policy-based governance, the small 'p' kind and the John Carver kind, is a good solid way to run a board. Yet there are a lot of boards with a lot of excuses about why they are not using policy-based governance. Why is this?

I think an answer can be found in one underlying truth about human nature: when we don't want to do something, we find all kinds of excuses to support our non- action, our procrastination. This truth extends to organizations and boards as well. Ask a board why they're not using policy-based governance and you'll likely get an answer that fits within one of these seven great excuses. 

I think another answer can be found in a second underlying truth about human nature: when we give excuses we aren't always truthful. This maxim also extends to organizations and boards as well. A board that gives an excuse about why they're not using policy-based governance will give an excuse and the real reasons will be hidden behind the excuse. 

For each of these seven excuses, I've suggested the hidden agendas that lurk beneath. I've also asked a question related to both the excuse and the hidden agenda to a board.

1. It costs too much to bring in policy-based governance. Things of value have a cost. There is always enough money in organizations to purchase things of value to the organization. Some of the costs to bring in policy-based governance are related to direct costs of facilitators or consultants who will help you to move to another way to work as a board and the costs of new board manuals and related materials. The costs of change are hidden as well and include the costs to change directors and staff who leave before their time because they don't want to play by the rules of policy governance. On the other hand, there are higher costs of high staff and director turnover because the rules are not clear. The costs of not implementing the mission in your organization are very high.

Q: What does it cost for your Board not to change? 


2. It takes too much time to change to policy-based governance. Change is a four-letter word to many people. We do not change unless there is a very good reason to change and usually that reason is external. A fright with the money; an attempted coup from the membership; and a government announcement are all external factors that can push an organization into change . These external factors are like the proverbial cattle prod in the hind quarters and will do wonders with a board that thinks that time to do board development is an issue. Boards that do not face change often spend more time fighting change than working with the inevitability of change. Using time as an excuse not to change is a poor one.

Q: What do you spend your time on now? 


3. We're doing OK without policy-based governance. Evaluation is almost always left to the last in any organization. The projects that we begin; the conferences that we host and the way the board works rarely have evaluation as part of the plan. This is based on the theory that if you don't look carefully at what you're doing, you won't see what is actually happening and then you won't have to change. Being 'OK' as a board hardly makes the grade for excellence that most organizations say that they want. Boards who regularly evaluate their performance are boards that are open to making the changes to be successful.

Q: What about your board governance is excellent?


4. The volunteers wouldn't go for this sissy stuff with policy-based governance. Dedicated volunteers who care about their organizations are often caught up in the significance of their mission. Concentrating on your mission is the purpose of an organization and one of the main jobs of the board. Unfortunately, that's not all that needs to happen. A board that focuses on the outcomes without seeing to the means will find itself in trouble. If boards care only about the mission and not about the means of how to run the board, the rest of the organization will quickly discover that sad fact and the mission is not accomplished.

Q: What policies do you have that support accomplishing your mission?


5. I've heard that with policy-based governance the Executive Director will grab the reins from the Board - and never let go! Control and accountability are as difficult for volunteers and staff to handle as power and authority. These words are used interchangeably and incorrectly in the best of organizations. Policy-based governance does not encourage a misuse of power and authority any more than any other type of board model. The facts are: leadership is shared; accountability is essential; power and authority are given to positions and to the people in those positions. All organizations and the boards that lead them must understand these words and their application to the way they work.

Q: What are the leadership issues for your board?


6. You have to be really big, and really have lots of money and lots of staff to use policy-based governance. Policy-based governance is based on a principle that there is a difference between what staff and boards do and working on these differences will make for efficiency. Separating what staff and Boards do in organizations does require that there be some staff to separate from the board. The size of the organization, the amount of budget or the numbers of staff makes little difference to using policy-based governance. What does make the difference is having the will to change. Boards which wait until they have certain budget, staffing or any other numbers really are not wanting to change.

Q: What numbers do you use so you don't have to change how your board works?


7. We're already using policy-based governance. There are an amazing number of boards who do not know that difference between a bylaw, a policy and a procedure. There an equally amazing number of boards who do not know the difference between board and staff policies. When a board says that it is using policy governance because it has policies, it may be 'whistling Dixie'. Boards that use part of policy-based governance but not all of it are also 'whistling in the dark'. Using policy-based governance is like being only a little bit pregnant. Unfortunately, you either are - or you're not. 

Q: How pregnant are you with policy-based governance?

The trouble with giving a list of excuses to people who may be looking for one is that they may end up using one! Please don't. Your mission is too significant, your board time too valuable to excuse less than excellent work.

Carol Humphries is a passionate advocate of policy-based governance having used this model as a director and staff person at many different levels and types of organizations. As a consultant, Carol has helped international, national, provincial and local organizations to embrace policy-based governance.

If you find that when you answer the questions that there is some discomfort, we'd be glad to talk to you. Call Wayne or Carol at AXI and have a chat about what could be better for your organization and your board.

Not to be reproduced in whole or in part without the written permission of the author.

 

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