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Best Board Books #11: Boards That Make a Difference

By John Pearson

If you want to spark some healthy conflict in your next conversation with ministry CEOs or senior pastors, throw this verbal grenade into the discussion: “Hey! What do you all think about policy governance?”

I mention this because even though the majority of boards I work with say they function as “policy governance” boards, I don’t believe them—because their micro-managing practices are so blatant.

Book #11:
Boards That Make a Difference: A New Design for Leadership in Nonprofit Organizations, by John Carver
(Order from Amazon)

According to Policy Governance Guru John Carver, “Governing by policy means governing out of policy in the sense that no board activity takes place without reference to policies. Most resolutions in board meetings will be motions to amend the policy structure in some way. Consequently, policy development is not an occasional board chore but its chief occupation.”

Consider John Carver’s insight on what he calls the flaws of “The Approval Syndrome.” They include: reactivity, sheer volume of material, mental misdirection, letting staff off the hook, unfairly putting staff on the hook, short-term bias, lack of clarity in the board’s contribution, and fragmentation (“a sequence of disconnected and unmanageably voluminous vertical slices of the whole…instead of a holistic, manageable fabric of horizontally connected policies”).

He adds, “We all profess that boards should deal with the big picture, but it is difficult to picture the forest by inspecting one tree at a time.”

One of my favorite Carver counter-intuitive commentaries describes what happens when a board delivers a “vote of confidence” for the CEO during a crisis situation.

In Carver’s policy governance bible, Boards That Make a Difference, he writes, “Curiously, there are times when the board goes through the approval process not intending to withhold authority from the CEO but to confirm it. A board might declare its support for the CEO by cloaking some controversial executive decisions with the prestige of the boardroom. Board motivation is usually expressed thus: ‘We want the staff (or others) to know the board is really behind the CEO on this.’ As long as the board and CEO understand that the decision is truly the CEO’s, this approval not only seems harmless but appears to be a healthy show of solidarity.”

Then Carver adds this zinger. “However, such a gesture of board support is called for only if the board has been sending weak signals about the nature of delegation. This kind of support is rarely warranted if the board has made it clear to all that all CEO decisions that are within board-stated bounds are always supported by the board. Official support of a specific action implies that such sporadic backup is necessary, or conversely, that the general philosophy of delegation is weak.”

Carver notes—in his massive 340-page hardback, with another 80 pages of resources and references—that “Board approvals are an unnecessary and dysfunctional method of board control, then, regardless of the ubiquity of the practice.” He goes on—in succeeding chapters—to build the case for “a more proactive, fair, and detrivializing approach to fulfilling the board’s moral and legal obligation to control the organization.”

If no one on the senior team or board of your nonprofit organization or church is familiar with Carver’s brand of policy governance (he invented the term), this is the starting point. Whether you agree or disagree that this board approach is right for your organization, it’s important to understand the continuum of choices available—and to seek consensus on defining your current reality and where your preferred governance future lies.

Interestingly, the book includes an excellent “ends” policy (a big Carver term) from Lancaster County Bible Church—defining the church’s sequential priorities. Evangelism is the church’s first priority.

Note: If 340 pages are a tad too much for you, Carver has a series of booklets, focusing on niche policy governance issues. Another option is to check out the “lean and mean” approach, favored by many including myself, of a 15- to 20-page Board Policies Manual, as described in the book, Good Governance for Nonprofits: Developing Principles and Policies for an Effective Board, by Fredric L. Laughlin and Robert C. Andringa. (See Best Board Books #10.)

BOARD DISCUSSION: Board members can’t always be blamed for governance dysfunction. Sometimes CEOs and senior team members invite confusion when they bring agenda items to the board—in essence, begging the board to micro-manage. Is it clear, in your organization, where the line falls between board decisions and staff decisions?

MORE RESOURCES: Check out the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom, by Dan Busby and John Pearson, including Lesson 36, “Decrease Staff Reporting and Increase Heavy Lifting

 

This article was originally posted on the “Governance of Christ-Centered Organizations” blog, hosted by ECFA.
John Pearson, a board governance consultant and author, was ECFA’s governance blogger from 2011 to 2020.
© 2021, ECFA and John Pearson. All rights reserved.


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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