Carver's Policy Governance=AE Model in Nonprofit = Organizations
by John Carver and Miriam=20 Carver

[This article was originally published as = "Le mod=E8le=20 Policy Governance et les organismes sans but lucratif" in the Canadian = journal=20 Gouvernance - revue internationale, Vol. 2, nos. 1, Winter 2001, = pp.=20 30-48. Republication here is by permission of the original = publisher.]

Over the last decade or two, there has been increasing interest in = the=20 composition, conduct, and decision-making of nonprofit governing boards. = The=20 board-staff relationship has been at the center of the discussion, but = trustee=20 characteristics, board role in planning and evaluation, committee = involvement,=20 fiduciary responsibility, legal liability, and other topics have = received their=20 share of attention. Nonprofit boards are not alone, for spirited debate = about=20 the nature of business boards has been growing as well. Whatever the = reasons for=20 this intense interest in governance, the Policy Governance model for = board=20 leadership, created by the senior author, is frequently a primary focus = of=20 debate.

The Nature of Governance and the Need for Theory

The Policy Governance model is, at the same time, the most well-known = modern=20 theory of governance worldwide and in many cases the least understood. = It=20 applies to governing boards of all types=97nonprofit, governmental, and=20 business=97and in all settings, for it is assembled from universal = principles of=20 governance. In this article, we will focus exclusively on its use in = nonprofit=20 boards, though many descriptions of its application in business (for = example,=20 Carver, 2000a, 2000c) and government (for example, Carver, 1996a, 1997d, = 2000b,=20 2001; Carver and Oliver, 2002) are available elsewhere.

Governing boards have been known in one form or another for = centuries. Yet=20 throughout those many years there has been a baffling failure to develop = a=20 coherent or universally applicable understanding of just what a board is = for.=20 While comparatively little thought has been given to developing=20 governance theory and models, we have seen management of = nonprofit=20 organizations transform itself over and over again. Managers have moved = through=20 PERT, CPM, MBO, TQM, and many more approaches in a continual effort to = improve=20 effectiveness. Embarrassingly, however, boards do largely what they have = always=20 done.

We do not intend to demean the intent, energy, and commitment of = board=20 members. There are today many large and well known organizations that = exist only=20 because a dedicated group of activists served as both board and staff = when the=20 organization was a "kitchen table" enterprise. Board members are usually = intelligent and experienced persons as individuals. Yet boards, as = groups, are=20 mediocre. "Effective governance by a board of trustees is a relatively = rare and=20 unnatural act . . . . trustees are often little more than high-powered,=20 well-intentioned people engaged in low-level activities" (Chait, = Holland, and=20 Taylor, 1996, p. 1). "There is one thing all boards have in common . . . = . They=20 do not function" (Drucker, 1974, p. 628). "Ninety-five percent (of = boards) are=20 not fully doing what they are legally, morally, and ethically supposed = to do"=20 (Geneen, 1984, p.28). "Boards have been largely irrelevant throughout = most of=20 the twentieth century" (Gillies, 1992, p. 3). Boards tend to be, in = fact,=20 incompetent groups of competent individuals.

An extraterrestrial observer of board behavior could be forgiven for=20 concluding that boards exist for several questionable reasons. They seem = to=20 exist to help the staff, to lend their prestige to organizations, to = rubber=20 stamp management desires, to give board members an opportunity to be = unappointed=20 department heads, to be sure staffs get the funds they want, to = micromanage=20 organizations, to protect lower staff from management, and sometimes = even to=20 gain some advantage for board members as special customers of their=20 organizations, or to give board members a prestigious addition to their=20 resumes.

But these observations=97accurate though they frequently are=97simply = underscore=20 the disclarity of the board's rightful job. Despite the confusion of = past and=20 current board practices, we begin in this article with the assertion = that there=20 is one central reason to have a board: Simply put, the board exists = (usually on=20 someone else's behalf) to be accountable that its organization works. = The board=20 is where all authority resides until some is given away (delegated) to = others.=20 This simple total authority-total accountability (within the law or = other=20 external authorities) is true of all boards that truly have governing=20 authority.

The Policy Governance model begins with this assertion, then proceeds = to=20 develop other universally applicable principles. The model does not = propose a=20 particular structure. A board's composition, history, and peculiar = circumstances=20 will dictate different structural arrangements even when using the same=20 principles. Policy Governance is a system of such principles, designed = to be=20 internally consistent, externally applicable, and=97to the great relief = of those=20 concerned with governance integrity=97logical. Logical and consistent = principles=20 demand major changes in governance as we know it, because these = principles are=20 applied to subject matter that has for many years been characterized by = a=20 hodgepodge of practices, whims of individuals, and capricious decision=20 making.

Such a change is a paradigm shift, not merely a set of incremental=20 improvements to the status quo. Paradigm shifts are difficult to cope = with,=20 since they often render previous experience unhelpful; they demand a = significant=20 level of discipline to be put into effect. But if there is sufficient = discipline=20 to use the Policy Governance model in its entirety, board leadership and = the=20 accountability of organizations can be transformed.

It is important that we underscore this point. Using parts of a = system can=20 result in inadequate or even undesirable performance. It is rather like = removing=20 a few components from a watch, yet expecting it still to keep accurate = time.=20 Unlike the traditional practices to which boards have become accustomed, = the=20 Policy Governance model introduces an integrated system of = governance=20 (Carver and Carver, 1996; Carver, 1997).

Greater effectiveness in the governing role requires board members = first to=20 understand governance in a new way, then to be disciplined enough to = behave in a=20 new way. Boards cannot excel if they maintain only the discipline of the = past=20 any more than managers of this new century can excel if they are only as = competent as those of the past. Does this ask too much of boards? = Perhaps it=20 does ask too much of many of today's board members. Yet there are other = board=20 members=97or potential board members who thus far have refused to = engage in=20 either the rubber-stamping or the micromanaging they see on boards=97who = would=20 rejoice in greater board discipline.

The Policy Governance model requires that boards become far more = enlightened=20 and more competent as groups than they have been. If that means losing = some=20 board members as the composition of boards goes through change, then the = world=20 will be the better for it. The Policy Governance model is not designed = to please=20 today's board members or today's managers. It is designed to give = organizations'=20 true owners competent servant-leaders to govern on their behalf.

Board as Owner-Representative and Servant-Leader

In the business sector, we can easily see that a board of directors = is the=20 voice of the owners (shareholders) of the corporation. It is not always = apparent=20 that nonprofit organizations also have owners. Certain nonprofits, such = as trade=20 associations or professional societies, are clearly owned by their = members.=20 Beyond such obvious cases of ownership, however, it is useful to = conceive that=20 community-based agencies in the social services, health, education, and = other=20 fields are "owned" by their communities. In neither trade associations = nor=20 community agencies is there is a legal equivalent of shareholders, but = there is=20 a moral equivalent that we will refer to as the "ownership." Looking at=20 ownership in this very basic way, it is hard to conceive of any = organization=20 that isn't owned by someone or some population, at least in this moral=20 sense.

The Policy Governance model conceives of the governing board as being = the=20 on-site voice of that ownership. Just as the corporate board exists to = speak for=20 the shareholders, the nonprofit board exists to represent and to speak = for the=20 interests of the owners.

A board that is committed to representing the interests of the owners = will=20 not allow itself to make decisions based on the best interests of those = who are=20 not the owners. Hence, boards with a sense of their legitimate ownership = relationship can no longer act as if their job is to represent staff, or = other=20 agencies, or even today's consumers (we will use that word to describe = clients,=20 students, patients, or any group to be impacted). It possible that these = groups=20 are not part of the ownership at all, but if they are, it is very likely = they=20 constitute only a small percentage of the total ownership.

We are not saying that current consumers are unimportant, nor that = staff are=20 unimportant. They are critically important, just as suppliers, = customers, and=20 personnel are for a business. It is simply that those roles do not = qualify them=20 as owners. They are due their appropriate treatment. To help in their = service to=20 the ownership, Policy Governance boards must learn to distinguish = between owners=20 and customers, for the interests of each are different. It is on behalf = of=20 owners that the board chooses what groups will be the customers of the = future.=20 The responsible board does not make that choice on behalf of staff, = today's=20 customers, or even its own special interests.

Who are the owners of a nonprofit organization? For a membership=20 organization, its members are the owners. For an advocacy organization, = persons=20 of similar political, religious, or philosophical conviction are the = owners.=20 There are many variations. But for purposes of this paper, we will = assume a=20 community organization, such as a hospital, mental health or family = service=20 agency, for which we can confidently say that the community as a whole = is the=20 legitimate ownership. In this case, it is clear that in a community=20 organization, the board must be in a position to understand the various = views=20 held in the community about the purpose of the organization. In short, = if the=20 community owns the organization, what does the community want the = organization=20 for?

Traditionally, boards have developed their relationships largely = inside the=20 organization=97that is, with staff. Policy Governance demands that = boards' primary=20 relationships be outside the organization=97that is, with owners. This = parallels=20 the concept of servant leadership developed by Greenleaf (1977, 1991), = in that=20 the board is first servant, before it is leader. It must lead the = organization=20 subject to its discoveries about and judgments of the values of the=20 ownership.

We have thus far referred repeatedly to the board and very little to = board=20 members; that is intentional. Since we are now establishing the starting = point=20 for governance thinking, it is important that we start with the body = charged=20 with authority and accountability=97the board as a group, not individual = board=20 members. It is the board as a body that speaks for the ownership, not = each board=20 member except as he or she contributes to the final board product. So = while we=20 might derive roles and responsibilities for individual board members, we = must=20 derive them from the roles and responsibilities of the board as a group, = not the=20 other way around. Hence, board practices must recognize that it is the = board,=20 not board members, who have authority.

The board speaks authoritatively when it passes an official motion at = a=20 properly constituted meeting. Statements by board members have no = authority. In=20 other words, the board speaks with one voice or not at all. The "one = voice"=20 principle makes it possible to know what the board has said, and what it = has not=20 said. This is important when the board gives instructions to one or more = subordinates. "One voice" does not require unanimous votes. But it does = require=20 all board members, even those who lost the vote, to respect the decision = that=20 was made. Board decisions can be changed by the board, but never by = board=20 members.

The Necessity for Systematic Delegation

On behalf of the ownership, the board has total authority over the=20 organization and total accountability for the organization. But the = board is=20 almost always forced to rely on others to carry out the work, that is, = to=20 exercise most of the authority and to fulfill most of the = accountability. This=20 dependence on others requires the board to give careful attention to the = principles of sound delegation.

Since the board is accountable that the organization works, and since = the=20 actual running of the organization is substantially in the hands of = management,=20 then it is important to the board that management be successful. The = board must=20 therefore increase the likelihood that management will be successful, = while=20 making it possible to recognize whether or not it really is successful. = This=20 calls upon the board to be very clear about its expectations, to = personalize the=20 assignment of those expectations, and then to check whether the = expectations=20 have been met. Only in this way is everyone concerned clear about what=20 constitutes success and who has what role in achieving it.

At this point, we wish to introduce the chief executive (CEO) role. = (Policy=20 Governance works in the absence of a CEO role, but the governing job is = more=20 difficult than with a CEO.) We are not concerned whether the CEO is = called=20 executive director, director-general, president, general manager,=20 superintendent, or any other title. We are, however, concerned how the = role is=20 defined and we will use the term "CEO" to reflect the role definition we = recommend.

We recommend that the board use a single point of delegation and hold = this=20 position accountable for meeting all the board's expectations for = organizational=20 performance. Naturally, it is essential that the board delegate to this = position=20 all the authority that such extensive accountability deserves. The use = of a CEO=20 position considerably simplifies the board's job. Using a CEO, the board = can=20 express its expectations for the entire organization without having to = work out=20 any of the internal, often complex, divisions of labor. Therefore, all = the=20 authority granted by the board to the organization is actually granted=20 personally to the CEO. All the accountability of the organization to = meet board=20 expectations is charged personally to the CEO. The board, in effect, has = one=20 employee.

It is important that boards maintain a sense of cause and effect with = respect=20 to their CEOs. The board creates the CEO; the CEO does not create the = board. As=20 the board contemplates its accountability to the ownership, it decides = that=20 creating a CEO role will be a key method in fulfilling that = accountability. It=20 is true that a founding father or mother will sometimes be the = inspiration for a=20 new organization, so that the board then created occurs after rather = than before=20 the founder. If the founder becomes the new CEO, it will seem that the = CEO is=20 parent to the board. Boards established in this way make a grave error = when they=20 mistake an accident of history for a proper view of their = accountability. The=20 CEO role, as such, is even in these cases created and governed by the = board (see=20 Carver, 1992).

Consequently, in every case, the board is totally accountable for the = organization and has, therefore, total authority over it=97including = over the CEO.=20 We can say that the board is accountable for what the CEO's job is and = that the=20 CEO do the job well. But we cannot say the CEO is accountable for what = the=20 board's job is and that the board do its job well. Unfortunately, much = of=20 current nonprofit practice supports this board-staff inversion. CEOs are = expected to tell their boards what to talk about (provide agendas), to = pull=20 their boards together when there is dissension, and to orient new board = members=20 to their job. Nowhere else in an organization are subordinates = responsible for=20 the conduct of the superiors. Yet virtually all nonprofit literature on=20 governance falls into this fallacy of CEO-centrism. "Thus, we argue, the = board's=20 performance becomes the executive's responsibility," say Herman and = Heimovics=20 (1991, p. xiii), a position we contend excuses and prolongs board=20 irresponsibility.

We have said being accountable in leadership of the organization = requires the=20 board (1) to be definite about its performance expectations, (2) to = assign these=20 expectations clearly, and then (3) to check to see that the expectations = are=20 being met. Traditional governance practices lead boards to fail in most = or all=20 of these three key steps.

Board expectations=97which are instructions=97when they are stated at = all, tend=20 to be unclear, incomplete, or a mixture of whole board and individual = board=20 member expressions. Board members form judgments of staff performance on = criteria the board (as a whole body) has never stated. Regular financial = reports=20 report against few or no criteria. Staff members can be seen taking = notes of=20 what individual board members say, as if it matters and as if they work = for the=20 board members rather than the CEO. Boards decide whether CEO's budgets = merit=20 approval when they have never stated the grounds for approval and = disapproval.=20 Virtually every board meeting=97other than in Policy Governance = boards=97is=20 testimony to carelessness of delegation and role clarity.

Traditional governance allows boards to instruct staff by the act of=20 approving staff plans, such as budgets and program designs. When the = board has=20 approved a staff recommendation, doesn't the resulting approved document = become=20 a clear board instruction? Actually, it does not. For example, when a = board=20 approves the CEO's personnel policies or budget, does it really mean as = an=20 instruction every tiny segment of that document? Does every budget line = and the=20 smallest issues of a program plan become a criterion on which the CEO = will be=20 judged? Certainly not. Even the most micromanaging board does not go = that far.=20 But to what level of detail should the CEO treat the approved document = as being=20 a board instruction, therefore a criterion for evaluation? The = tradition-blessed=20 habit of board approvals is a poor substitute for setting criteria, then = checking that they have been met. Board approvals are not proper = governance, but=20 commonplace examples of boards not doing their jobs.

What about the clear assignment of expectations to a person or = persons? In=20 conventional practice, boards' delegation to a CEO is frequently = compromised by=20 delegating the same responsibilities more than once or by delegating to = around=20 the CEO to sub-CEO staff. An example of the former is when a board = charges the=20 CEO and a board finance committee for financial decisions. Delegating = around the=20 CEO occurs either when a board gives instructions to the financial = officer or=20 other person who reports to the CEO or when a board itself judges the=20 performance of sub-CEO staff.

Finally, in the absence of clear instructions or clear assignment, = evaluating=20 performance is an exercise in futility. Yet boards receive volumes of=20 information that purports to monitor organizational performance. The = sheer=20 amount of information masks the fact that proper monitoring is still not = occurring. Because monitoring performance is the systematic disclosure = of=20 whether board expectations have been met, monitoring that is fair and = incisive=20 can only occur after clearly stated and clearly assigned board = expectations.

Using the Ends/Means Distinction

The point was made earlier in this paper that the board is = accountable that=20 the organization works. Clearly, the word "works" must be defined; = defining it=20 establishes the board's expectations for the organizations, the = performance that=20 will constitute success. The board need not control everything, but it = must=20 control the definition of success. It is possible to control too much, = just as=20 it is possible to control too little. It is possible to think you are in = control=20 when you are not. The zeal of a conscientious board can lead to = micromanagement.=20 The confidence of a trusting board can lead to rubber stamping. Defining = success=20 is a matter of controlling for success, not for everything. How can a = board=20 control all it must, rather than all it can?

Boards have had a very hard time knowing what to control and how to = control=20 it. Policy Governance provides a key conceptual distinction that enables = the=20 board to resolve this quandary. The task is to demand organizational = achievement=20 in a way that empowers the staff, leaving to their creativity and = innovation as=20 much latitude as possible. This is a question of what and how to = control, but it=20 is equally a question of how much authority can be safely given away. We = argue=20 that the best guide for the board is to give away as much as possible, = short of=20 jeopardizing its own accountability for the total.

What is there to control? In any organization, there are uncountable = numbers=20 of issues, practices, and circumstances being decided daily by someone. = The=20 Policy Governance model posits that all of these decisions can be = classified as=20 those that define organizational purpose, and those that don't. But the = model=20 calls for a very narrow and careful definition of purpose: it consists = of what=20 (1) results for which (2) recipients at what (3) worth.

Let us define these more fully: Some decisions directly describe the = intended=20 consumer results of the organization, for example, reading skills, = family=20 harmony, knowledge, or shelter from the elements. Some decisions = directly=20 describe the intended recipients of such results, such as adolescents, = persons=20 with severe burns, or low income families. Some describe the worth of = the=20 intended results, such as in dollar cost or priority against other = results.

In Policy Governance, this triad of decisions is called "ends." Ends = are=20 always about the changes for persons to be made outside the = organization, along=20 with their cost or priority. Ends never describe the organization itself = or its=20 activities. For example, the professional and technical activities in = which the=20 organization engages are not ends. In a school, for example, which = students=20 should acquire what knowledge at what cost are ends issues. Ends are = about the=20 organization's impact on the world (much like cost-benefit) that justify = its=20 existence.

Any decision that is not an ends decision is a "means" decision. In = that same=20 school, the choice of reading program, teachers' credentials, and = classroom=20 arrangement are means issues. Most decisions in an organization are = means=20 decisions; some are very important means. But even if a decision is = extremely=20 important, even if it is required by law, even if it is critical to = survival,=20 unless it passes the ends test (designation of consumer results, which=20 consumers, or the worth of consumer results), it is not an ends = decision. Hence,=20 means include personnel matters, financial planning, purchasing, = programs,=20 services and curricula, and even governance itself. No organization was = ever=20 formed so it could be well governed, have good personnel policies, a = fine=20 budget, sound purchasing practices, or even nicely planned services, = programs or=20 curricula.

The ends/means distinction is critical. Many boards claiming to use = the model=20 routinely confuse the Policy Governance meaning of ends and means, = thereby=20 sacrificing much of the benefit the model can give. For example, means = is not=20 synonymous with "administration" as some have misinterpreted (Herman and = Heimovics, 1991, p. 44). Ends is not synonymous with "strategic plan," = as others=20 have misinterpreted (Murray, 1994). The ends/means distinction is not = comparable=20 to any other distinction used in management or governance; it is not = parallel to=20 policies/procedures, strategies/tactics, policy/administration, or=20 goals/objectives. Indeed, ends may include very small and specific = decisions=20 about a single consumer, while means may include very important = programmatic=20 decisions as well as how a board constructs its committees. The = ends/means=20 distinction is exclusively peculiar to Policy Governance (with the = possible=20 exception of Argenti, 1993) and, therefore, is governed by Policy = Governance=20 principles. In Policy Governance,means are means simply because they = are not=20 ends.

Are ends the same as mission? Unfortunately, the answer is usually = "no,"=20 because mission statements have not traditionally had to conform to the=20 definition we have given ends. Consider the following mission statement = of a=20 mental health center: "The mission of the XYZ Center is to be a = responsible=20 employer, providing quality mental health services in a cost-efficient = manner."=20 This statement=97quite acceptable in traditional governance=97is = entirely means, no=20 ends. This organization can fulfill its mission even if consumers' lives = are not=20 any better. In contrast, consider this broad statement of ends: "The XYZ = Center=20 exists so that people with major mental illness live productive lives in = an=20 accepting community at a cost comparable to other providers." In the = latter,=20 unless the targeted group are benefited in the required way, the = organization is=20 not successful, no matter how good an employer it is and no matter how = much=20 "quality" its services have. Notice that the cost component in the first = statement is the cost of staff activity (services), while in the second=20 statement it is the cost of consumer results.

No matter how central ends are to the organization's existence, = however,=20 because the board is accountable for everything, it is accountable for = means as=20 well. Accordingly, it must exercise control over both ends and means, so = having=20 the ends/means distinction does not in itself relieve boards from any=20 responsibility. The ends/means distinction does, however, make possible = two=20 entirely different ways of exercising control, ways that=97taken = together=97allow=20 the board to have its arms responsibly around the organization without = its=20 fingers irresponsibly in it, ways that for the staff maximize = accountability and=20 freedom simultaneously. The board simply makes decisions about ends and=20 means=97that is, it controls the organization's ends and means=97in = different ways,=20 as follows:=20

Using input from the owners, staff, experts and anyone in a = position to=20 increase the board's wisdom, the board makes ends decisions in a = proactive,=20 positive, prescriptive way. We will call the board documents thus = produced=20 "Ends policies."=20
Using input from whoever can increase board wisdom about = governance,=20 servant leadership, visioning, or other skills of governance and = delegation,=20 the board makes means decision about its own job in a proactive, = positive,=20 prescriptive way. We will call the board documents thus produced = "Governance=20 Process policies" (about the board's own job) and "Board-Staff Linkage = policies" (about the relationship between governance and management). = Both of=20 these categories are means, but they concern means of the board, not = the=20 staff.=20
Using input from whoever can increase its sense of what can = jeopardize the=20 prudent and ethical conduct of the organization, the board makes = decisions=20 about the staff's means in a proactive, but negative and = boundary-setting way.=20 Because these policies set forth the limits of acceptable staff = behavior, that=20 is, the unacceptable means, we will call the board documents thus = produced=20 "Executive Limitations policies."

At this point in our argument, we have used the ends/means concept to = introduce new categories of board policies. These categories of board = policies=20 are exhaustive, that is, no other board documents are needed to govern = except=20 bylaws. (Articles of incorporation or letters patent are required to = establish=20 the nonprofit as a legal entity, but these are documents of the = government, not=20 the board.) We will not discuss bylaws here, except to say they are = necessary to=20 place real human beings (board members) into a hollow legal concept (the = corporate "artificial person") (Carver, 1995). However, so that we might = continue to discuss the concepts represented by the words "ends" and = "means,"=20 yet distinguish the titles of policy categories, we will capitalize = Ends,=20 Executive Limitations, Governance Process, and Board-Staff Linkage.

The negative policies about operational means requires further = discussion.=20 Here is the logic: If the board has established Ends and has determined = through=20 monitoring that those Ends are actually accomplished, it can be argued = that the=20 staff means must have worked. In other words, the means by which Ends = were=20 accomplished, though interesting, is of little importance to the board. = This=20 logic is largely accurate, but there is an important problem with it. = Some means=20 can be unacceptable even if they do work. Means that are effective, but = still=20 "unacceptable" are ones that are improper treatment of people or assets, = that=20 is, means that are imprudent or unethical. Consequently, although there = is no=20 reason for a board to control staff means decisions for reasons of=20 effectiveness, there is reason to control staff means for reasons of = prudence=20 and ethics.

Whoever is directly responsible for producing ends must decide which = means to=20 use. That is, one must be prescriptive about one's own means. But the = board is=20 not charged with producing ends, only with defining them. It is to the = board's=20 advantage to allow the staff maximum range of decision-making about = means, for=20 skill to do so is exactly why staff were employed. If the board = determines the=20 means of its staff, it can no longer hold the staff fully accountable = for=20 whether ends are achieved, it will not take advantage of the range of = staff=20 skills, and it will make its own job more difficult. Happily, it is not=20 necessary for the board to tell the staff what means to use. In Policy=20 Governance the board tells the staff or=97more accurately=97the CEO what = means not=20 to use!

Therefore, it is the board's job to examine its values to determine = those=20 means which it does not want in its organization, then to name them. The = board=20 can then tell its CEO that as long as the Ends are accomplished and the=20 unacceptable means do not occur, the CEO can make all further decisions = in the=20 organization that he or she deems wise. It is in this way that = extensive, albeit=20 explicitly circumscribed, authority is granted to the CEO. Effectiveness = demands=20 a strong CEO; prudence and accountability to the board demand that the = CEO's=20 power be bounded.

This unique delegation technique has a number of advantages. First, = it=20 recognizes that board interference in operational means makes ends = harder and=20 more expensive to produce. Therefore, delegation which minimizes such=20 interference is in the board's interest. Second, it accords to the CEO = as much=20 authority as the board can responsibly grant. Therefore, there is = maximum=20 empowerment inside the organization to harness for ends achievement. = Third, it=20 gives room for managerial flexibility, creativity and timeliness. = Therefore, the=20 organization can be agile, able to respond quickly to emergent = opportunities or=20 threats. Fourth, it dispels the assumption that the board knows better = than the=20 staff what means to use. Therefore, the board does not have to choose = between=20 overwork and being amateurs supervising professionals. Fifth, in this = system all=20 means that are not prohibited are, in effect, pre-approved. Therefore, = the board=20 is relieved from meticulous and repetitive approval of staff plans. = Sixth, and=20 perhaps most importantly, by staying out of means decisions, except to = prohibit=20 unacceptable means, the board retains its ability to hold the CEO = accountable=20 for the decisions that take place in the system.

Thus, when we say a board is responsible that its organization works, = we=20 simply mean that the organization (1) accomplishes the intended results = for the=20 intended people at the intended cost or priority=97expressed in the = board's Ends=20 policies; and that it (2) avoids unacceptable methods, conduct, = activities, and=20 circumstances=97unacceptable means expressed in the board's Executive = Limitations=20 policies.

Expressing Expectations in Nested Sets

We have established that Policy Governance boards express their = expectations=20 for themselves and for their organizations in four categories of board = policies:=20 Ends, Executive Limitations (the unacceptable means), Governance = Process, and=20 Board-Staff Linkage (the latter two are board means divided into two = parts). The=20 separation of organizational values into these categories is a major = organizing=20 principle for governing boards. These four categories completely embrace = all=20 possible organizational values (except those more pertinent to articles = of=20 incorporation/letters patent and bylaws)=97no other policies or = documents are=20 needed. But another feature must be added to enable the board to address = its=20 desired level of specificity within these categories.

To ensure precision as well as completeness in policy-making, Policy=20 Governance provides an additional principle, one which recognizes the = varying=20 sizes of issues and values. One Ends statement of a nonprofit board may = be that=20 persons without shelter should have adequate housing. Another may be = that=20 families with school age children should have housing that allows = children of=20 different genders to sleep in separate rooms. It is easy to see that the = second=20 example is more detailed, or "narrower," than the first. Notice that = these two=20 statements can be pictured as a set of nested bowls, in that the first = is a=20 broader value that includes the second one within it. Even more detailed = choices=20 exist within the second level, and so on to third, fourth, and more = bowls until=20 the specificity reaches a level where Mr. Smith rather than Mr. Jones = gets a=20 particular amount of shelter next week.

Now let's illustrate the "nested bowls" concept with an example of=20 unacceptable means. One means value of a nonprofit board may be that the = CEO not=20 allow anything imprudent, illegal or unethical. Another may be that = unbonded=20 persons may not have access to material amounts of funds. The first = example is a=20 broader prohibition than the second, but less specific. Even more = detailed=20 "bowls" exist, of course, such as a further proscription against access = to more=20 than $5,000 on any one occasion or more than $8,000 cumulatively over a = one year=20 period.

Board values about ends and unacceptable means, as well as the = board's own=20 means, then, can be stated broadly, or more narrowly. The advantage of = stating=20 values broadly is that such a statement is inclusive of all smaller = statements.=20 The disadvantage, of course, is that the broader the statement, the = greater is=20 the range of interpretation that can be given to it. To take advantage = of the=20 fact that values or choices of any sort can be seen as nested sets, the = Policy=20 Governance board begins its policy making in all four categories by = making the=20 broadest, most inclusive statement first.

The board then considers the range of interpretation that such a = statement=20 allows, and determines whether it is comfortable with the statement = being given=20 any interpretation that is reasonable. If the board would be=20 uncomfortable delegating such a range, that is a signal that the board = must=20 define its words more narrowly, moving into more detail one level at a = time. At=20 some point, the board will have narrowed its words to the point that it = can=20 accept any reasonable interpretation of those words. Now the board has = reached=20 the point of delegation.

As an example, consider an Executive Limitations policy in which the = board is=20 putting certain financial conditions and activities "off limits." At the = broadest level, the board might say: "With respect to actual, ongoing = financial=20 condition and activities, the CEO shall not allow the development of = fiscal=20 jeopardy or a material deviation of actual expenditures from board = priorities=20 established in Ends policies." That covers the board's concerns about = the=20 organization's current financial condition at any one time, for there is = likely=20 nothing else to worry about that isn't included within this "large bowl" = proscription.

However, most boards would think such a broad statement leaves more = to CEO=20 interpretation=97even if reasonable interpretation=97than the board = wishes to=20 delegate. Hence, the board might add further details, such as saying the = CEO=20 shall not: (1) Expend more funds than have been received in the = fiscal=20 year to date except through acceptable debt. (2) Indebt the organization = in an=20 amount greater than can be repaid by certain, otherwise unencumbered = revenues=20 within 60 days, but in no event more than $200,000. (3) Use any of the = long term=20 reserves. (4) Conduct interfund shifting in amounts greater than can be = restored=20 to a condition of discrete fund balances by unencumbered revenues within = 30=20 days. (5) Fail to settle payroll and debts in a timely manner. (6) Allow = tax=20 payments or other government ordered payments or filings to be overdue = or=20 inaccurately filed. (7) Make a single purchase or commitment of greater = than=20 $100,000, with no splitting of orders to avoid this limit. (8) Acquire, = encumber=20 or dispose of real property. And (9) Fail to aggressively pursue = receivables=20 after a reasonable grace period.

A given board might go into less or more detail than in this example. = But in=20 any case, these principles stay intact: The language moves from a broad = level=20 toward a lesser level (we showed two levels in the example just given). = The=20 values that become policy are generated by the board's deliberations, = not=20 approved from a staff recommendation. The board, not the staff, decides = what to=20 say and where to stop. No matter where the board stops, the CEO is = granted=20 authority to use any reasonable interpretation of the board's words. The = board=20 can shrink, expand, or change the content of the policy at any time, as = long as=20 it does not judge performance retroactively.

This view of organizational issues=97as values that can be specified = moving=20 methodically from the broadest to more narrow levels=97allows the board = to manage=20 the amount delegated. The board is always clear about the authority = being given=20 away. The recipient of the board's delegation is always clear about the = amount=20 of accountability expected in return. There is a continuum of sizes of = issues=20 upon which, in Policy Governance, the board owns the broadest level, = then=20 successively smaller levels until it decides to delegate, after which it = is safe=20 to allow the remaining decisions to be made by others.

It is often observed by other governance authors that the distinction = between=20 what is board work and what is executive work is a na=EFve distinction. = There is=20 no universal rule, they contend, to mark where board policy stops and=20 administration begins. Indeed, they are right as far as traditional = governance=20 is concerned, for the conventional approach to the board job is unable = to make a=20 policy-administration distinction that holds up in the real world. = Policy=20 Governance, however, introduces entirely different, more powerful = conceptual=20 tools=97 rigorous "one voice" clarity of delegation using descending = levels of=20 board control within the ends/means context. Even though there is still = no=20 predetermined or fixed point where board work automatically becomes = executive=20 work, each board using the principles we are describing can establish = and, when=20 necessary change, a distinct point of delegation applicable to its own=20 organization. It is at that point, by the values of that board, = for=20 that organization, for that time, that governance stops = and=20 "sub-governance" begins.

To summarize the policy development sequence, Policy Governance = boards=20 develop policies which describe their values about Ends, Executive = Limitations,=20 Governance Process, and Board-Staff Linkage. Each policy type is = developed from=20 the broadest, most inclusive level to more defined levels, continuing = into more=20 detail until the board reaches the point at which it can accept any = reasonable=20 interpretation of its words from its delegatee. A step-by-step guide to = such=20 development of policy documents is available (Carver and Carver, 1997). = Ends and=20 Executive Limitations are delegated to the CEO, who is held accountable = by the=20 board for accomplishing any reasonable interpretation of the boards = expectations=20 in these areas. Governance Process and Board-Staff Linkage policies are=20 delegated to the board Chair, who is given the authority to ensure that = the=20 board governs in accordance with its own expectations of itself, using = any=20 reasonable interpretation of the policy language.

Board Discipline, Mechanics, and Structure

It is clear that the Policy Governance model requires a board to = govern in an=20 organized, planned and highly disciplined manner. Boards which are = accustomed to=20 talking about issues simply because they interest individual board = members will=20 find agenda discipline to be a major challenge, as will boards that rely = on=20 their staffs to supply their agendas. Not everything is appropriate for = board=20 discussion just because it is interesting or even because the staff = wants the=20 board to make the decision. Matters that have been delegated to the CEO = should=20 not be decided by the board or by board committees, for in making such=20 decisions, the board renders itself unable to hold the CEO = accountable.

Policy Governance boards know that their job must result in the = production of=20 three deliverables. (1) The first deliverable is a systematic linkage = between=20 the organization and the ownership. This is not public relations. The = board=20 connects with the ownership in order to ascertain the range of ownership = values=20 about the purpose of the organization. If the board is to make Ends = decisions on=20 behalf of the owners, it must know what the owners in all their = diversity think.=20 (2) The second deliverable is written governing policies in the four = areas,=20 using the principles we have described. (3) The third deliverable is the = assurance of organizational performance, that is, performance which can = be shown=20 to be a reasonable interpretation of the board's Ends and Executive = Limitations=20 policies.

We use "deliverables" to mean job products, outputs, or values-added. = Since=20 these summarize the purpose for the board's job, producing these = deliverables is=20 what board meetings are for. In fact, the list of job outputs can be = considered=20 to be a perpetual job description, for every agenda is an instance of = the=20 board's working to perform its job. A board can decide how much, in what = detail,=20 and at what level of excellence it will pursue its perpetual agenda in = the=20 ensuing year. By doing so, it takes control of its own agenda, rather = than=20 allowing its agenda to be staff-driven. Establishing its own job = description and=20 the longterm or midterm agenda is recorded as one of the board's = Governance=20 Process policies. As we shall shortly point out, if the board sketches = its=20 annual agenda only broadly, the specifics will be filled in by the board = Chair,=20 who is charged with taking care of Governance Process details.

Accordingly, the board must plan meetings that enable and guarantee = the=20 production of these deliverables. Being entertained or intrigued by = staff jobs=20 is no substitute for the board's accomplishment of its own job. While = the board=20 is entitled to any information it wants, it must be aware that = collecting=20 information about staff activities and even conscientiously listening to = many=20 staff reports does not substitute for governance. Let us again reiterate = that=20 the board, not the staff, is responsible that a board's meetings fulfill = its=20 governance responsibilities.

In taking responsibility for its own performance, the board confronts = the=20 difficulty of acting responsibly as a group of equals. Since the board = is by=20 definition a group of peers, no one has authority over anyone else. The = first=20 action of a group of peers is to create a position of Chairperson=97a = first among=20 equals=97to help it stay on task. Although it is important that each = board member=20 continue to take responsibility for the board's group behavior, the = board grants=20 the Chair extra authority required to make rulings that keep the board = on track.=20 To stay consistent with the superior role of the board as a group, = however, in=20 Policy Governance the Chair only has authority that is within a = reasonable=20 interpretation of the board's policies on Governance Process and = Board-Staff=20 Linkage. Hence, the Chair is truly the servant-leader of the board = (Carver,=20 1999).

It is usual for nonprofit boards to expect the Chair to supervise the = CEO,=20 but in Policy Governance there is no need for the Chair to have = authority over=20 the CEO. Only the board has authority over staff operations, and it = exercises=20 that authority through carefully crafted policies. It is not only = unnecessary,=20 but harmful for the Chair to tell the CEO what the board wants, for the = board=20 speaks for itself. Consequently, both the Chair and the CEO work for the = board=20 as a whole, but their roles do not overlap because they are given = authority in=20 different domains. The Chair's job is to see to it that the board gets = its job=20 done=97as described in Governance Process and Board-Staff Linkage = policies. The=20 CEO's job is to see to it that the staff organization gets its job = done=97as=20 described in Ends and Executive Limitations policies.

Board Treasurers, as commonly used, threaten CEO accountability as = well as=20 the one voice principle. Treasurers are typically expected to exercise=20 individual judgment about the financial dealings of the organization. = But Policy=20 Governance boards do not allow Treasurers to exercise authority over = staff.=20 (Rendering an official judgment of performance against one's own = individual=20 criteria has the same effect as exercising authority.) By creating a = role with=20 supervisory authority over the CEO with respect to financial management, = the=20 board cannot then hold the CEO accountable for that topic. The board = should=20 accept responsibility for financial governance (setting policy, then = comparing=20 performance) and require the CEO to be accountable for managing finances = so that=20 performance compares favorably to policy. The typical use of a = Treasurer, when a=20 Policy Governance board is required by law to have one, is to assist the = board=20 in making financial policy, never to judge CEO compliance against the=20 Treasurer's own expectations. For more thorough treatment of the board's = role in=20 financial oversight, including commentary on the Treasurer and finance=20 committee, see Carver (1991, 1996b).

In keeping with the "one voice " principle, the board can allow no = structures=20 or practices in which board members or board committees exercise = authority over=20 staff, any function of staff, or any department of staff. Typical = nonprofit=20 boards have a myriad of traditions that violate the one voice principle, = such as=20 placing the Chair between the board and the CEO. So it is common for = boards to=20 underestimate the amount of board member interference in operations. = Such=20 interference, even when well-intended, undermines the board's ability to = hold=20 the CEO accountable, for the CEO can argue that his or her actions were = taken in=20 compliance with a board member instruction.

Advice is a concept often carelessly used in nonprofit boards. This = seemingly=20 innocuous and well-intended practice can have the same deleterious = effect as=20 direct instruction by individuals or committees. It is common for the = board,=20 board committees, or individual board members to give advice to staff. = But=20 advice, if it is really advice, can be rejected. If staff has any doubt = that=20 advice given by the board or one of its components cannot safely be = turned down,=20 the clarity of board-to-staff delegation will be undermined. Policy = Governance=20 boards refrain from giving advice or allowing their members to give = advice=20 unless advice is requested. This protects the board's ability to hold = the CEO=20 accountable for his or her own decisions. The CEO and any of the staff = can=20 request advice if they need it, and they can request it from wherever = they=20 wish.

Traditional boards frequently create committees to assist or advise = the CEO=20 or staff, such as committees on personnel, finance, program, property=20 maintenance, and other such staff means issues. In Policy Governance, = such=20 committees are illegitimate. They constitute interference in the CEO's = sphere of=20 authority and accountability, and damage the board's ability to hold the = CEO=20 accountable.

If, for example, the staff wishes to have an advisory committee, it = is=20 perfectly free to create one, then to use the advice or not as it deems = wise.=20 If, however, the board controls the mechanism of advice, a very = different=20 relationship between advisors and advisees is established. The wisest = route is=20 for the board to govern and leave advice and advisory mechanisms to the = staff's=20 own initiative. This way the staff gets all the advice it needs, role = clarity=20 and accountability are maintained, and board members are frequently = spared=20 unnecessary work.

Policy Governance boards use committees only to help the board to do = its own=20 job. Hence, a committee which explores methods of ownership consultation = about=20 Ends options is legitimate, as is a committee that studies possible = sources of=20 fiscal jeopardy that the board might address in an Executive Limitations = policy.=20 But a human resources committee that advises on or intervenes in = personnel issus=20 is not. To request advice or assistance with one's own job is acceptable = and=20 does not compromise accountability, but to foist help or advice on = subordinates=20 is not only unnecessary but destructive of accountability as well.

Policy Governance takes seriously the normally rhetorical assertion = that=20 boards be visionary and provide long term leadership. The discipline = required=20 for this challenge cannot be overstated. In fact, Policy Governance has = been=20 criticized as a "heroic board" model that is romantically idealistic! = Yet boards=20 do, in fact, have a critical job to do; no amount of helping staff can=20 substitute for getting its own job done. Boards must persevere with the = arduous,=20 complex task of describing purpose and ethics/prudence boundaries. = Forming those=20 values into clear policies is far harder than telling the staff how to = do its=20 job. Speaking proactively for the ownership requires strong commitment = not to=20 take reactive refuge in rituals, reports, and approvals.

This requires board member expertise relevant to governance, not = management.=20 Board members should no longer be recruited based on their having skills = that=20 mirror the skills of staff. Governance excellence requires members who = can think=20 conceptually and with a long term perspective, able to welcome a = diversity of=20 opinions but abide by group decisions. They must be able to speak on = behalf of=20 the ownership rather than merely from their own or some splinter group=20 perspective. They must place organizational accountability above = personal=20 gratification. They must be able to view the board's task of assuring=20 performance at arm's length=97through setting expectations (using the = ends/means=20 principle and values viewed as descending "bowls"), delegating pointedly = (to a=20 CEO if possible), and monitoring. And it is to the function of = monitoring or=20 evaluation that we turn now.

Evaluation

Evaluation of performance is not extraneous to the board's job. It is = as=20 integral to the board's job as it is to any manager's. But, as we have = shown,=20 proper evaluation is impossible unless the board has first stated its=20 expectations and assigned them to a specific delegatee. That is, = evaluation of=20 staff performance cannot occur appropriately unless the board has done = its job=20 first.

Moreover, if the board has a CEO, the results of proper evaluation of = organizational success is the only fair evaluation of CEO performance. = Since the=20 CEO's job is to see to it that the organization meets the board's = expectations,=20 there is nothing more and nothing less to evaluate when assessing the = CEO. Thus,=20 the board's evaluation of organizational performance is the same as = board=20 evaluation of CEO performance (Carver, 1997a). Monitoring the evaluative = data,=20 as we shall see, is an ongoing activity=97perhaps as frequently as = monthly=97and the=20 board may wish to have a formal evaluation of the CEO once each year. = However,=20 the CEO's formal evaluation is only a summary of the accumulated = monitoring=20 data, not something in addition.

But let us consider the monitoring or evaluative information itself. = Not all=20 information is useful in monitoring performance. There are two types of=20 information that are useful for other purposes, but not for monitoring: = one is=20 information for board decisions, the other is information simply to = satisfy=20 board members' casual interest. To examine evaluation or monitoring, we = must=20 first separate out these two types of information, for they do not = qualify as=20 monitoring against pre-established criteria.

First, information for board decisions is needed in order for the = board to=20 make wise policy in the first place. To create policies that are both = realistic=20 and demanding, boards require information from a variety of sources. = These=20 sources include staff, owners, experts, associations to which the board = may=20 belong, and others. This information is required for the board's own=20 decision-making and does not judge staff accomplishment. Boards should = invest a=20 great deal of energy in gathering wisdom, spending perhaps half their = time in=20 becoming educated. So information for board decisions is essential for = board=20 performance, but not for monitoring staff performance.

Second, information for board interest is information about the = organization=20 or its environment that is not useful for board decision-making, but is = of=20 political, social, or technical interest to board members. This = information does=20 not include data that directly measure the degree of staff performance = on board=20 expectations, for that would qualify it to be called true monitoring=20 information. This kind of information is incidental to the board's job = of=20 monitoring, but comprises most of what most traditional boards receive. = There is=20 nothing wrong with boards getting all the incidental information they = want, but=20 there is something very wrong with the delusion that they are at that = time doing=20 their job. In traditional governance, most staff reports, including most = financial reports and reports that purport to be "evaluation" are = incidental=20 information simply because they are not data compared with previously = stated=20 board criteria.

Monitoring or evaluative information must speak directly to = whether=20 board expectations are being fulfilled. Consequently, it is always = related to=20 expectations set by the board in its Ends and Executive Limitations = policies.=20 This discipline not only makes it unnecessary for the board to trudge = through=20 the mountains of data staff are able to assemble, but it keeps = evaluation fair.=20 After all, it is only right that the CEO should know ahead of time the = criteria=20 on which he or she will be judged. Since monitoring information is only = that=20 information that describes actual performance compared to expected = performance,=20 it is evident that most reports collected, examined and approved by = traditional=20 boards constitute interesting information, but cannot be said to be = effective=20 monitoring reports. For example, boards that gravely approve (or accept) = financial statements thinking they have thereby exercised fiduciary=20 responsibility are simply engaging in a meaningless ritual, for without = criteria=20 they don't even know what in those reports would have been = disapprovable.

When monitoring is defined as we have done here, reports tend to be=20 straightforward and transparent. Each board member can follow the link = from=20 board criteria to management data, for the report is not cluttered with=20 incidental information. Monitoring is not nearly as difficult or = time-consuming=20 when boards know what performance they are expecting to see proven. = Monitoring=20 is thus more exact and, simultaneously, requires negligible board = meeting time.=20 In fact, we recommend that monitoring data be mailed to board members, = thereby=20 preserving valuable meeting time for board education and deliberation. = Getting=20 monitoring largely out of board meetings allows those meetings to focus = on=20 creating the future rather than reviewing the past, because inspection = of the=20 past is now safely routinized. For each Ends and each Executive = Limitations=20 policy, the board will have set a frequency and a method of monitoring, = after=20 which the process runs automatically. The choice of method will be a = report from=20 the CEO, judgment by a disinterested party (for example, an auditor), = or=97less=20 frequently=97direct board inspection of organizational practices or = circumstances.=20 It turns out to be rare that monitoring needs to be discussed in the = board=20 meeting, except for board members to affirm that they have received and = read the=20 mailed reports.

To illustrate the nature of what is reported in a Policy Governance=20 monitoring report, we will use two items from an Executive Limitations = policy=20 already shown. In that policy, among other unacceptable means, the CEO = was told=20 he or she cannot (1) expend more funds than have been received in the = fiscal=20 year to date except through acceptable debt and (2) indebt the = organization in=20 an amount greater than can be repaid by certain, otherwise unencumbered = revenues=20 within 60 days, but in no event more than $200,000. Here is what the = monitoring=20 data might look like for these two provisions: Item 1: Through the = end of=20 May, $3,694,800 has been expended. Receipts in the same period were = $3,654,728.=20 The shortfall of $40,072 was offset by a $60,000 short term loan. Item = 2: Total=20 debt is a 45 day working capital loan for $60,000 incurred on May 25. = Revenues=20 of $75,000 from our foundation grant, guaranteed by letter of May 5, are = not=20 otherwise encumbered and will be used, in part, to retire the debt prior = to due=20 date.

Notice that the data are rather bare-bones, only enough to answer the = question, unobscured by incidental information. Board members should = adopt a=20 "prove it to me" attitude, so if the information submitted is = insufficient to=20 convince them, then more detail can be added. But the detail must be = such that=20 directly address the criteria. For example, what data prove the "not = otherwise=20 encumbered" statement? Obviously, the complexities of some organizations = will=20 cause the monitoring data to have more facets than in our simple = example. Even=20 then, however, the reported data should be as brief as possible and = maintain a=20 razor-sharp connection to the policy-based criteria being monitored. If = more=20 interesting, explanatory information, other than that directly = addressing the=20 criteria, is desired by the board or offered by the CEO, it should not = clutter=20 the monitoring report, but be distributed separately. Board members can = know=20 anything they wish, but they should never be in doubt about what is = disclosure=20 of performance on the board's criteria and what is not.

Using similar criterion-focused reasoning, when the board seeks to = evaluate=20 itself, it compares its actual behavior and accomplishment with the = behavior and=20 accomplishment it committed to in its Governance Process and Board-Staff = Linkage=20 policies (Carver, 1997b). Policy Governance boards tend to self evaluate = on a=20 frequent basis=97we recommend every meeting=97because a more = sophisticated system=20 requires continual tending.

Board Meetings

Because in Policy Governance the board is in charge of its own job, = board=20 meetings become the board's meetings rather than management's meetings = for the=20 board. Board meetings occur because of the need for board members to = learn=20 together, to contemplate and deliberate together, and to decide = together. Board=20 meetings are not for reviewing the past, being entertained by staff, = helping=20 staff do its work, or performing ritual approvals of staff plans. As a = result,=20 many board meetings may not look like traditional board meetings at all, = but=20 learning and studying sessions or joint meetings with other boards, = particularly=20 in communities where boards rarely talk with each other.

The CEO is always present, but is not the central figure. Other staff = might=20 be present when they have valuable input on matters the board is to = decide. For=20 community boards, with rare exceptions meetings would be open=97not to = please the=20 law, but because a board commitment to transparency. The board is not = merely a=20 body to confirm committee decisions, but the body that makes the = decisions.=20 Board committees might be used to increase the board's understanding of = factors=20 and options, but never to assume board prerogatives or remove difficult = choices=20 from the board table. In contrast to the old bromide that "the real = works takes=20 place in committees," in Policy Governance the real work takes place in = the=20 board meeting.

Board meetings should thus be more about the long term future than = the=20 present or short term future . . . more about ends than means . . . more = about a=20 few thoroughly considered large decisions than many small ones. And by = their=20 very character, meetings should demonstrate that the board's primary=20 relationship is with owners, not with staff.

Summary

The Policy Governance model recognizes that any governing board is = obligated=20 to fulfill a crucial link in the "chain of command" between = owners=97whether legal=20 or moral in nature=97and operators. The board does not exist to help = staff, but to=20 give the ownership the controlling voice. The board's = owner-representative=20 authority is best employed by operating as an undivided unit, = prescribing=20 organizational ends, but only limiting staff means, making all its = decisions=20 using the principle of policies descending in size. The model enables = extensive=20 empowerment to staff while preserving controls necessary for = accountability. It=20 provides a values-based foundation for discipline, a framework for = precision=20 delegation, and a long term focus on what the organization is for = more than=20 what it does.

The Policy Governance model provides an alternative for boards = unhappy with=20 reactivity, trivia, and hollow ritual=97boards seeking to be truly = accountable.=20 But attaining this level of excellence requires the board to break with = a long=20 tradition of disastrous governance habits. And it offers a challenge for = visionary groups determined to make a real difference in tomorrow's = world.

References

Argenti, John. Your Organization: What Is It For? = London:=20 McGraw-Hill Europe, 1993.

Carver, John. "Redefining the Board's Role in Fiscal = Planning."=20 Nonprofit Management and Leadership, 1991, 2 (2), 177-192.

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=97=97=97. "Policy Governance Model Views Citizens as = Owners."=20 Nation's Cities Weekly, January 29, 1996a, 5.

=97=97=97. Three Steps to Fiduciary = Responsibility. The=20 CarverGuide Series on Effective Board Governance, No. 3. San Francisco:=20 Jossey-Bass, 1996b.

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Carver, John, with Caroline Oliver. Corporate Boards = That Create=20 Value: Governing Company Performance from the Boardroom. San = Francisco:=20 Jossey-Bass, 2002.

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=97=97=97. The Servant as Leader. Indianapolis: = The Robert K.=20 Greenleaf Center, 1991.

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Copyright John and Miriam Carver, 2010 Policy = Governance is a=20 registered service mark of John Carver.
E-mail: info@carvergovernance.com	Updated: Dec. 30, 2009	Webmaster: = exArte=20 Design

Carver's Policy Governance=AE Model in Nonprofit = Organizationsby John Carver and Miriam=20 Carver