12 January 2007

Policy Governance: The Road to Change...

The Board of Director's at your company are talking again about Policy Governance. The reason is that change is necessary and when it's time for a new worldview, there are only a few real choices anymore. The old way hasn't worked and now it's time to start with a blank sheet of paper.

So what is Policy Governance?

Policy Governance�, an integrated board leadership paradigm created by Dr. John Carver, is a groundbreaking model of governance designed to empower boards of directors to fulfill their obligation of accountability for the organizations they govern. As a generic system, it is applicable to the governing body of any enterprise. The model enables the board to focus on the larger issues, to delegate with clarity, to control management's job without meddling, to rigorously evaluate the accomplishment of the organization; to truly lead its organization.

In contrast to the approaches typically used by boards, Policy Governance separates issues of organizational purpose (ENDS) from all other organizational issues (MEANS), placing primary importance on those Ends. Policy Governance boards demand accomplishment of purpose, and only limit the staff's available means to those which do not violate the board's pre-stated standards of prudence and ethics.

Is management clear on the mission? Is the CEO out of synch with what the Board of Directors "Ends" are and what direction they are heading in? Policy Governance may be the answer. Yet a new mindset shift or a new methodology will not get you to where you want to be without effective Governance Strategy Execution.

Reinventing your board isn't easy and putting a fence around the CEO perimeter may be even harder. The goal is to make sure that your policies are resilient and endure beyond the potential longevity of a CEO. If you can accomplish this, then it takes the personal human to human potential for conflicting personalities or styles out of the equation. You have to start high enough and in the most broad context:

The CEO shall not cause or allow any organizational practice, activity, decision or circumstance that is in violation of commonly accepted business and professional ethics and practices...

Now that you have the outer perimeter set, you can start to narrow it down and provide greater scrutiny in places you are really concerned about.

As an example, and this is not a one way street:

  1. The Board will not provide orders to people who report directly or indirectly to the CEO.
  2. The Board will not review or evaluate staff other than the CEO.
At the end of the day or the fiscal year for that matter, being on the Board of Directors requires courage and the ability to make hard decisions. Policy Governance is one way to take the change process and to make it happen like you never have in the past. And remember, John Carver and the Policy Governance model are one in the same. He is the inventor and steward for this mechanism of change in the global corporate enterprise.

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