The Policy Governance® Model: An Overview
Policy Governance® is an innovative model created by Dr. John Carver to enable strategic leadership by governing boards. It addresses board job design and the board-management partnership. The board governs on behalf of some identifiable ownership, deciding the broad values of the organization.
Board policies are developed in four areas: ENDS policies prescribe what benefits will occur for which people at what cost. EXECUTIVE LIMITATIONS policies describe the prudence and ethics boundaries on acceptable staff acts, practices and circumstances. GOVERNANCE PROCESS policies clarify the board’s own job and rules, including how it connects to its ownership. BOARD-STAFF LINKAGE policies describe the delegation and accountability linkage through the CEO. One of the beauties of the model is that these last three sets of policies are very stable, allowing the board to spend virtually all of its time on developing Ends and linking with the ownership.
With these policies firmly in place, the CEO is empowered by the board toward Ends and within Executive Limitations. This constraint approach to staff “means” enables the board to stay out of internal operation, yet control the bounds of acceptability of staff behavior. Budgeting, personnel, risk, compensation and all other practices are thus controllable with little board time and very brief documents. Monitoring of CEO performance using the criteria in these policies becomes the CEO’s evaluation.
In Policy Governance®, the board is proactive, explicit about its values and long-range in the majority of its concerns. It avoids both meddling, and rubber stamping. Board and CEO jobs do not become confused. Accordingly, board committees stay out of staff work and, though staff views and knowledge are made known to the board, the staff rarely recommends what board decisions should be. Because roles are very clear, free communication among board and staff causes no problem. Board-Staff interactions can be enriching without leading either to meddling or to loss of board prerogatives. Board agendas are usually shorter, the deliberation usually on long term Ends and Board mindset one of true strategic leadership.