A Carver Policy Governance Guide, Ends and the Ownership

John Carver, Miriam Carver

• Publisher: Jossey-Bass
• Year: 2009
• ISBN:
  9780470620168
• Edition: 2
• Topic: Business
• Subtopic: Nonprofit Organizations & Charities
• Index: Business

The Carver Policy Governance® Guide series includes six booklets that offer board members a description of John Carver's Policy Governance model of board leadership. Policy Governance enables a board to fulfill its accountability to its organization's "owners, " whether the owners are association members, city residents, company shareholders, or a community of interest. Policy Governance addresses the board's engagement in financial, programmatic, and personnel matters; roles of officers and committees; reporting and evaluation; agendas; and other aspects of the board job.

Ends and the Ownership helps boards distinguish between what an organization is for and what it does (ends versus means)—a basic feature of the innovative Policy Governance model. This important guide also discusses the concept of ownership and includes sample policies that can help board members effectively prioritize and govern.

The Policy Governance model is based on the functions rather than the structure of a governing board. It outlines commonsense principles about governing that fit together into an entire system. The practices of the Policy Governance board, which are consistent with the principles, allow it to control without meddling, focus on long-term organizational outputs, powerfully delegate to a CEO and staff, and discharge its fiduciary responsibility in a visionary, strategic manner. Because the model is a total system, the Carver Policy Governance Guide series offers boards a complete set of principles for fulfilling their various obligations.

CARVER GUIDE

All organizations exist on someone’s behalf. We don’t mean the persons they exist to benefit, though it is possible for these to be the same people. A large group, such as a community, could decide to have an organization that benefits a small group, such as people without literacy skills. Or a small group, such as members of a particular church, could decide to have an organization to benefit a large group, such as impoverished people in developing countries. In these instances, the community and the church membership are akin to shareholders, that is, owners of the respective organizations. The boards are stewards on behalf of the community and the church membership. And in fulfilling that trust or stewardship, the board clarifies whose lives shall be benefited or changed, and which part of the life experience of a targeted population will be different than it might otherwise have been. And since resources are always limited, the board expects the operating organization to yield enough of that result to be worth what the effort costs.

We all know these things; they aren’t new insights. And yet we are all also accustomed to organizations, particularly nonprofit and governmental organizations, being somewhat unclear or even confused about who, for them, are equivalent to shareholders and, for them, what the difference in beneficiaries’ lives should be. This is odd, since surely the only way we can tell if an organization is even worth existing is by ascertaining if, in light of owners’ values, it makes enough of the right difference for the right people to justify its cost.

By contrast, many organizations are very clear about what they do, that is, about what keeps the staff busy. For many organizations, it appears that being busy at commendable activity is the test of organizational worth, and being effective is disregarded. Yet we must know that being busy is not the same as being effective at making the right difference for the right people at the right cost or priority. How odd that we confound being busy with being effective. And how odd that sometimes, in an activity-focused world, simply being busy comes to be treated as if it is, in fact, a result! So having a new program up and running for the planned expense, processing a number of clients through the clinic per dollar, or having so many children in a swimming class for the expected per-child cost are treated as effectiveness. Programs and activities that can demonstrate cost-busyness are treated as if they have demonstrated cost-effectiveness. Distinguishing between what an organization is for and what it does is a basic feature of the Policy Governance model. This feature is the ends-means distinction.

In this Guide, we begin by explaining ends and give examples of Ends policies. (We will capitalize Ends when referring to a board’s actual Ends policy documents but not when referring to the idea or concept of ends.) Development of Ends policies is driven by the other topic of this Guide, the related issue of ownership, for it is on the owners’ behalf that the board makes ends decisions. So we will go on to explain the ownership concept and explore some of the options a board may use to connect with its organization’s ownership. We will argue that more than any of the decisions that a board must make, decisions about what the organization is for should be made with owners’ values in mind.

But first, we will provide a brief overview of Policy Governance in case you have not read it before or need a reminder. If you understand Policy Governance well, you can skip this section of the Guide.

Policy Governance in a Nutshell

• The board exists to act as the informed voice and agent of the owners, whether they are owners in a legal or moral sense. All owners are stakeholders but not all stakeholders are owners, only those whose position in relation to an organization is equivalent to the position of shareholders in a for-profit corporation.

• The board is accountable to owners that the organization is successful. As such, it is not advisory to staff but an active link in the chain of command. All authority in the staff organization and in components of the board flows from the board.

• The authority of the board is held and used as a body. The board speaks with one voice in that instructions are expressed by the board as a whole. Individual board members have no authority to instruct staff.

• The board defines in writing its expectations about the intended effects to be produced, the intended recipients of those effects, and the intended worth (cost-benefit or priority) of the effects. These are Ends policies. All decisions made about effects, recipients, and worth are ends decisions. All decisions about issues that do not fit the definition of ends are means decisions. Hence in Policy Governance, means are simply not ends.

• The board defines in writing the job results, practices, delegation style, and discipline that make up its own job. These are board means decisions, categorized as Governance Process policies and Board-Management Delegation policies.

• The board defines in writing its expectations about the means of the operational organization. However, rather than prescribing board-chosen means—which would enable the CEO to escape accountability for attaining ends—these policies define limits on operational means, thereby placing boundaries on the authority granted to the CEO. In effect, the board describes those means that would be unacceptable even if they were to work. These are Executive Limitations policies.

• The board decides its policies in each category first at the broadest, most inclusive level. It further defines each policy in descending levels of detail until reaching the level of detail at which it is willing to accept any reasonable interpretation by the applicable delegatee of its words thus far. Ends, Executive Limitations, Governance Process, and Board-Management Delegation policies are exhaustive in that they establish control over the entire organization, both board and staff. They replace, at the board level, more traditional documents such as mission stateme...

Table of contents

• The Carver Policy Governance Guide Series
• Praise
• Title Page
• Copyright Page
• CARVER GUIDE
• About the Authors