"A fish is the last to acknowledge the existence of water,"an African proverb tells us. And sometimes boards are the last to acknowledge that policy-making is the environment in which they operate. Long before organizational theorist John Carver trademarked the words "Policy Governance," trustees depended upon informal or formal policies to guide their own work, the work of the chief executive, and the institution as a whole. Whenever 10 or 20 people gather together on behalf of a worthy cause, organizing principles or policies are sure to follow.
From minutes to manual
In Boards that Make a Difference, John Carver writes, "Wisdom expressed but not codified slips away" (page 45). That's why compiling a policy manual is essential.
Although there is no one-size-fits-all template for a policy manual, most include some standard fare: organizing principles for the board's work, expectations of the president, financial principles, academic standards, and procedures for student and employee relations. A policy manual organizes all current board policy statements in a convenient place for ready reference and regular updating.With increasing frequency these days, schools keep board policies on a password-protected, trustee-only Web site.
When a board wastes its time scavenging through old minutes in search of policy guidance or reinventing the same old governance wheels over and over again, the whole school suffers. Efficiency in governance requires intentionality, continuity, and clearly articulated expectations if all the partners — trustees, administrators, and faculty — are to understand how they should proceed. Attention to policy-making is a big step in that direction.
Policies in practice
Trustees of theological schools are all over the waterfront in their approaches to policy-making. At one extreme: boards for which every action, word, and decision seems predetermined by a policy. At the other: boards that operate quite well, thank you, with policies sprinkled throughout the approved minutes to be retrieved as needed. Some boards are disciplined about working within a carefully stated set of policies. Others are more casual when it comes to codifying board and institutional procedures.
Any approach can work for a time, because the value-added aspects of a board's work go well beyond the sum of its policies. Effective board leadership requires that the board keep its agenda firmly fixed on what matters most to the mission effectiveness of the school. By crafting and then faithfully following their policies, boards can stay focused on mission.
But "policy" and "governance" are not synonymous, and it is possible for policy-making to get in the way of good governance. It's possible for efficiency to become a stumbling block to effectiveness. If the goal is to maximize the power of policies in the pursuit of institutional effectiveness — as it always should be — governance leaders should consider the following statements.
➤ Policies are a means, not the end, of board governance.
➤ Policies should illuminate, not obscure, the institutional situation.
➤ Policies should empower, not control, the board.
The means, not the end
Advice taken out of context frequently leads to less than the desired outcomes. A case in point: John Carver's assertion that "policy development is not an occasional board chore but its chief occupation" (page 72). Wave this statement in front of an all-ready charged up board development committee, and confusion (or worse) is likely to follow. Such was the situation that prompted a call from a frustrated first-term board member.
"Two years ago, we adopted a set of policies, and now it's as though the board has nothing left to do," she explained. "The way everyone talks and acts, you'd think the board's work is pretty much done - at least for the time being. Is that right?"
This trustee had run head-on into a gross, but not uncommon, misapplication of the principles of Policy Governance: confusing means (policies) with the desired end (good governance). In a flurry of activity, the board developed a tidy system for organizing its work, approved a policy manual, and then was left wondering what to do next. When the role of the board was reduced to a string of policy statements, the boundaries within which it operated became uncomfortably tight.
As Governance as Leadership explains, the problem is not with Policy Governance as a system, "but rather the type of thinking it promotes: technical, incremental, and intended mostly to detect and correct errors" (page 46).
Well-crafted policies should open the door to new vistas of board work. They should be the means by which trustees achieve their full leadership potential. The board's policies are first and last the avenue by which its members become full participants in fulfilling the institution's mission with economic vitality.
Illuminate, not obscure
Consider this typical policy statement: "The president shall present to the board a balanced budget, which includes a contingency equivalent to at least 5 percent of the annual operating expenditures." Sounds good.
After all, who would argue with the need for a balanced budget with some dollars to spare? But take a closer look. How is the board to know what it took to achieve the desired ends? As worded, with the focus on the end goal (a balanced budget) and not what it took to get there, the policy obscures rather than illuminates the board's understanding of the budgeting process.
A more helpful version of the policy statement comes from adding a second sentence: "For the board's information, a list shall be attached of items not included, but which are mission-critical."
The causal relationship between board policies, day-to-day operations, and institutional outcomes are sometimes hazy, at least in the immediate sense. It's a tricky business connecting the dots: the board said this ... the administration did that ... the school achieved these things. And if policy statements conspire to keep trustees in the dark, it can be even harder for the board to make the necessary linkages. The problem with many board policies is that there often hasn't been enough discussion about what data the board needs, when the board needs that data, and in what form it should be presented. As a result, the board doesn't ask the right questions because board members don't know what the right questions are.
Empower, not imprison
John Carver assures us that "when a board lives from its policies, the policies will either work or be changed." That's hopeful news for trustees who feel enslaved to policies that no longer empower. When the words "That's not how we do things" become a mantra in the boardroom, trustees stop thinking of new possibilities. And when the words are backed up by rigidly followed policies, board work can seem like a prison. In such places, the board is held captive by its policies instead being empowered by them.
But it doesn't have to be this way. It's not as though the board's policies were handed down from Sinai, complete and perfect for all time. Granted, a lot of work goes into developing board policies. But policies are human inventions, and they should be revised when needed. Change simply for change's sake is never desirable, but neither is complacency.
Clinging to outmoded policies as the path of least resistance doesn't serve the board or the school well. Today's boards must be nimble and adaptable to a fast-changing institutional landscape. They require policies that empower them to do their best work.
No single approach to governing can guarantee that a board will always be effective. But as board leaders acknowledge the role that policies play in their work and then commit themselves to maximizing the power of their policy-making, the probability of successful governance grows stronger. They will be set free to swim as far as their dreams for the school and God's good blessing will take them.
Boards That Make a Difference: A New Design for Leadership in Nonprofit and Public Organizations, by John Carver (Jossey-Bass, 2006).
Governance as Leadership: Reframing the Work of Nonprofit Boards, by Richard P. Chait, William P. Ryan, and Barbara E. Taylor (John Wiley and Sons, 2005).
Nonprofit Board Answer Book: Practical Guidelines for Board Members and Chief Executives, by Robert C. Andringa and Ted. W. Engstrom (National Center for Nonprofit Boards, 1997).
Building a policy manual
You may not have a policy manual, but you already have policies! The first step in creating a manual is compiling the policies you already have — conflict of interest policy, whistleblower policy, gift acceptance policy, and many more. Next, consider what you lack.
The Nonprofit Board Answer Book outlines seven steps in the process of creating a policy manual.
Get the board to understand and agree.
Establish major policy areas (e.g. authority structures, finances and resource generation, enrollment management, and academic systems).
Assign the drafting team.
Write a first draft.
Ask legal counsel to review the drafts.
Present drafts to the board for approval.
Continue to review and revise board policies.
What is a policy?
A policy is a guiding principle that informs the board’s ongoing decisions and actions. It is an expression of its decision-making process.
Policies predict the actions that boards will take. Some describe how important processes are carried out. Examples: board self-assessment policy, presidential evaluation policy.
Others address standards of conduct. Example: conflict of interest policy.
Still others clarify delegations of authority. Examples: Policies that grant authority to subsidiary boards, the administration, and the faculty.
“Policies are intended to help boards govern within a set of agreed-upon standard guidelines,” says the Johnson Center for Philanthropy at Grand Valley State University. “Governance policies can help keep a system of checks and balances in place and help board members hold each other accountable.” The influential book Governance as Leadership warns that “without policies, organizations would be in constant chaos, disputing, negotiating, and reinventing every day the basic rules and procedures by which the staff and board operate” (page 42).
Taken together, policies form a roadmap for action:
Expectations. Board policies should lay out board expectations for all aspects of the operation of the school.
Assessment. Policies can demand that the institution’s progress be compared to peer institutions, objective standards, or board-defined goals. Regular assessment allows for quick action when outcomes deviate from the plan.
Accountability. Policies help the board hold itself and campus personnel accountable for fulfillment of assigned responsibilities.