In mid-January, we held a second webinar. It addressed the objections and misconceptions often heard about Policy Governance®. We know not everyone can attend a webinar. As with the first webinar, we want to share ideas for how to respond to the three misconceptions, if you hear them.
If you hear a current or prospective board member saying, “Policy Governance is too rigid!” you might respond like this:
If someone thinks a board’s policies define Policy Governance, you can point out that it is, in fact, defined by 10 first principles. A board’s policies should align with those principles. But the principles are not driven by the policies.
The principles are foundational. Yet, the application of those principles can vary. There are principles that any board would be wise to follow. For example:
- The board is accountable to “those whose position is equivalent to that of a for-profit corporation’s shareholders.”
- The board is the highest authority within the organization.
- And the CEO has only one boss—the board—instead of each individual board member.
Some of the 10 principles are unique to Policy Governance. John Carver devised these principles to enable optimum delegation by the board to the CEO. As a result, the board can get its arms around the organization, without getting its fingers in. A board that has “fingers in” results in inefficient and ineffective operations.
The principles enable the board to determine the level of authority it gives the CEO. However, they do not specify where the boundaries for delegation to the CEO are. Rather, they state only that the board must set the boundaries. Neither are these boundaries set in stone. The principles enable the board to change them.
Some see Policy Governance as rigid because it limits board members from pursuing personal interests. But pursuing individual interests takes time away from rightful areas of the board’s responsibilities. As you expect professionals (e.g., doctors, lawyers) to attend to all areas in their scope of practice, so too should board members!
Some directors using Policy Governance object to the “negative language” in the Executive Limitations policies.” You might respond using some of the following points:
Negative language doesn’t always have a negative effect. If you have a biopsy on a tumor and the test for malignancy comes back negative—that’s positive.
Telling someone that they must do something hardly fosters a positive environment. Instead, telling the CEO what results to achieve and setting boundaries without telling the CEO what to do allows for flexibility and creativity while avoiding undue risk to the organization. It is also more efficient than prescribing how the CEO should achieve results.
A board using Policy Governance directs the CEO to achieve Ends. It also says the CEO can use any means, except those the board deems unacceptable because they are imprudent or unethical, even if they would achieve the Ends.
Consider our use of ‘don’t do it’ lists (e.g., don’t speed). Imagine how much longer the Ten Commandments would be without negative language.
Can boundaries be set with positive language? Why not say, “The CEO shall ensure staff are treated fairly,” instead of, “The CEO shall not allow unfair treatment of staff?” Both could be used as a boundary. But boards that use the former and similar statements for other boundaries tend to slide into more prescriptive statements over time.
In practice, positive statements tend to lead to the board playing the role of management consultant. Negative language safeguards against the natural, predictable, and accountability-destroying return to prescribing means. A board that tells the CEO what to do and how to do it can no longer hold the CEO accountable for the result produced. The board made the decision about means and is accountable for the outcome.
Another objection you might hear: “Policy Governance takes too much time to learn.” You can use the following ideas to respond:
Some view governance as management one step up. So, they see management and governance as two parts of the same discipline. We disagree and see governance as ownership one step down. In other words, governance and management are distinct disciplines. Honing your management skills does not enhance your governance abilities.
Another way to think of this is that Policy Governance is a new technology for most, even though it’s been around since the 1970s. Board members must be competent in using the system if the board is to maximize its benefits.
So, yes, there is a learning curve to using this technology. And it takes more time than engaging in aimless experimentation with the system. That is the investment needed to gain the system’s benefits over a “best practices” approach to governance. Is the learning required too much time? Or is it the right amount?
If your board is grappling with any of these misconceptions, schedule a Discovery Call and see if we might be able to support you in your governance journey.
Consider registering for our virtual Introduction to Policy Governance® course. One module in the course dedicated exclusively to Executive Limitations. Our first course in 2025 starts February 5th, with two webinars on February 19th and March 12th.