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Policy Governance® - A Model that Increases Board Effectiveness

Olan Hendrix (left) and C. David Mustine (right)

Reprinted from Acredula -- Summer 2007

In the mid-1970’s, John Carver developed an integrated model for board governance that he called Policy Governance, a system of principles to increase board effectiveness and enhance organizational leadership.

Policy Governance enables boards to focus on accountability to the owners of the organization (moral and/or legal), and the future of the organization (what result, for whom, at what worth), while empowering the CEO and his/her staff to manage the organization within pre-defined values and perspectives. Policy Governance strengthens the organization through board adoption of a comprehensive set of policies and protects the organization through board monitoring of policy compliance.

There are a number of key values that underpin a Policy Governance board – all are intended to increase effectiveness of the board and the organization it governs. Because Policy Governance values unity and clarity, the principles recommend that the board speaks with one voice, and only through written policies. This strategy keeps messages and information consistent and cohesive. Policy Governance also states that board members and the board chair are all servant leaders – an important quality to maintain for effective leadership.

Finally, Policy Governance values a proactive board that takes responsibility for its own processes - two widely accepted principles for effective performance.

Four categories of board policies comprise the Policy Governance model. The first category is Ends. These policies clarify the board’s expected results of the organization and answers one or more of the following questions: what result is to be produced; for whom is the result produced; and what is the worth, cost or priority of the result?

The second category is Staff Limitations. These policies establish the boundaries within which the CEO must operate and proscribe unacceptable actions. It is much more empowering to instruct the CEO what not to do than what to do.

The third category is Board Process. These policies are the board’s own rules for governing. The fourth category is Board-Staff Relations. These policies clarify the board’s delegation of authority and the means and processes through which use of this authority is monitored and evaluated. To ensure the fulfillment of these principles, a Policy Governance board operates from a comprehensive policy manual. Ends and Staff Limitation policies are also rigorously monitored according to a schedule established by the board.

In addition to increasing the effectiveness of organizations, Policy Governance is a model that also emphasizes accountability. Though the policy is easy to understand because it is so logical, it can be difficult to implement because it requires board members to abandon old habits in favor of a new discipline. Despite the sometimes slow start to execute the plan, however, boards from small and large organizations throughout the United States and in many other countries have discovered that Policy Governance improves the overall performance of boards and organizations and is well worth the effort.

If you would like to learn more about Policy Governance, please contact David Mustine of Mustine Consulting or Olan Hendrix of Leadership Resource Group. Mr. Mustine and Mr. Hendrix were trained by John and Miriam Carver at the Policy Governance Academy.