Monday, September 27, 2010

Governance vs. Management: Policy Governance® model can help Directors “get out of the weeds.”

For more than two decades now, I have been observing the election, development, conduct, and decision-making processes of nonprofit governing boards. My interest in how boards govern (or don’t) has increased to the point where the characteristics of elected leaders has become more interesting to me than ever before. I share these interests with many senior association professionals. Closely connected are my observations of board-staff relationships, primarily because these are the key success indicators relative to AMG’s successful service to clients.

Recently, at a session of the American Society of Association Executives (ASAE) annual meeting, we discussed observations on governance versus management among nonprofit organizations. Our discussion on why boards exist did not demean the passion, energy, and commitment of board members. Those of us in the profession know Board members to be very intelligent, experienced people as individuals. Yet as John Carver, author of Boards That Make a Difference states, “sometimes boards tend to be incompetent groups of very competent individuals.”

In our ASAE session, we spent a good amount of time discussing Carver’s Policy Governance® Model (www.carvergovernance.com) and concluded that one central reason a board exists is to be accountable for the efficiency of its association. The board is where all authority and accountability resides. And yet, so many boards do not understand governance and instead involve themselves at various levels in management and operations.

I like Carver’s model because it doesn’t make room for board members to involve themselves in the operations of the organization. Instead, boards should be strategic thinkers with the long term health of the organization in mind. To do this, boards employ a CEO or Executive Director to report on the operations of the organization. Through this executive figure, Carver asserts that boards need (1) to be definite about its performance expectations, (2) to assign these expectations clearly, and then (3) to check to see that the expectations are being met.

To achieve a harmonious board-staff relationship--and ultimately succeed as an organization--boards should demand organizational achievement in a way that empowers the staff, leaving to their creativity and innovation as much freedom as possible. This is a question of what and how to control, but it is equally a question of how much authority can be safely given away. Carver argues that the best guide for the board is to give away as much as possible, short of jeopardizing its own authority.
Board members should no longer be recruited based on their having skills that mirror the skills of staff. Policy Governance® seriously asserts that boards be visionary and provide long term leadership. Boards must persevere in describing purpose and ethics/prudence boundaries. Forming clear policies from those values is far harder than telling the staff how to do its job. Board members must be experts in governance, not management.

Carver’s Policy Governance® model provides an alternative for boards unhappy with the amount of reactivity, trivia, ritual and management they are involved in and are seeking to be truly accountable. But attaining this level of excellence requires that a board breaks with traditions and preference to manage and embrace governance. The model offers a challenge for visionary groups determined to make a real difference in tomorrow's world. That is why those of us in the business of association management believe Carver’s model has much merit.

9 comments:

  1. The practice of governing is almost different from managing: It is not about managing companies but ensuring they are well run, Governance can be said to be representing the owners, or the interest group of people, who represent a firm, company or any institution.


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  2. Governance can be considered as representative of the owners, or the interest group of people representing a company. While management is the second to the Board of Directors, and are obliged to work according to the wishes of the Board of Directors.

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  3. The practice of governing is mainly different from managing: It is not about managing companies but confirming they are well run. It is less about doing and taking action than reflecting and learning. The key principles are that of prudence, acting in good faith, stewardship, duty, openness, transparency and integrity. These are the real building-blocks of excellence in corporate governance and the inclination actions for an effective board.


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  4. royston and Aaron, well said. Thanks for your input!

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  5. Governance is the activity of the Department. They relate to decisions that define expectations, grant power, or verify the performance, while management. In all areas of business and regulatory activities are the acts of people get together to achieve the desired goals and objectives.

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  7. Our school board has been using the Carver model for the past 9 years with much success. Once all members agree to the ten fundamental principles of policy governance, it’s much easier to get on with business.

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