Policy Governance

Round Table 2: Board LeadershipCullen Coates & Neel Lane

Episcopal Community Services in America Round Table 2011

April 28, 2011

Goals of Policy Governance Initiative

• Create an effective structure that will guide us now

• Create a structure that will guide future boards and managers

• Help us focus better on what really matters

For-Profit BoardsMeasures of Effectiveness

• Decisions tested in the market• Business results test board

direction/decisions• Legal duty of loyalty to shareholders• Frequent regulatory guidance

Non-Profit Boards

• Revenues from sources other than clients

• Services provided at discount or for free

• No market to reflect consumer effectiveness

• No automatic danger signal• Absent a market test, the board must

perform that function

Common Drains on Non-Profit Board Effectiveness

• Time on the trivial• Short-term bias• Reactive stance• Reviewing, rehashing, redoing• Leaky accountability• Diffuse authority

Goals of Policy Governance

• “Cradle” vision• Address fundamental values• Encourage external focus• Separate large issues from small issues• Force forward thinking• Enable pro-activity – creating rather

than approving• Use board time efficiently

Implementing Board Policy - Mechanics

• Create written board policies• Maintain and distribute policies• Approve and embrace board

policies• Evaluate board actions against

policies

Policy Categories

• Ends – what needs are to be met, for whom, and at what cost

• Executive Limitations – principles that limit choice of staff means – practices, activities, circumstances, methods

• Board Governance Process – how the board represents the clients and supporters, and how it provides strategic leadership

• Board-Executive Director Linkage – how authority is passed to the Director, how use of that authority is assessed

Ends

• Vision or Mission Statement• What needs are to be met, for whom

and at what cost• Ends justify our existence• Ends define our success

Executive Limitations

• Global Executive Constraints• Personnel Matters• Financial Planning and Budgeting• Financial Condition and Activity• Emergency Executive Director

Succession• Assets Protection• Communication and Support to the

Board• Focus of Grants or Contracts

Executive LimitationsCommunication and Support to Board

• Shall submit monitoring data in a timely, accurate and understandable fashion, directly addressing provision of board policies being monitored

• Shall advise Board of relevant trends, medial coverage, material external and internal changes.

• Shall deal with the Board as a whole.

Board Governance ProcessGlobal Governance Commitment and Style

• Outward Vision• Diversity of Viewpoints• Strategic Leadership• Clear distinction of board and chief

executive roles• Collective rather than individual

decisions• Future rather than past or present• Proactive rather than reactive

Board Governance ProcessBoard Job Description

• Written governing policies to ensure performance

• Board performance criteria includes:• Attendance at Board Meetings• Participation• Attendance at retreats and orientation• Participation in fund-raising• Support of Special Events

Board Governance ProcessChairperson’s Role

• Shall assures the integrity of the board process and may represent the board to outside parties.

Board – Executive Director LinkageGlobal and Unity of Control

• The boards’ sole official connection to the operational organization, its achievements, and conduct will be through the Executive Director.

• Only decisions of board acting as a body are binding on the Executive Director

Board – Executive Director LinkageAccountability of Executive Director

• Executive Director is the board’s only link to operational achievement and conduct.

Board – Executive Director LinkageMonitoring Executive Director Performance

• Organizational accomplishments of goals set by board policies

• Organizational operation established by board