liberate your non profit board
DESCRIPTION
A step by step guide to assist not for profit Boards to work out their role, manage their CEO and develop the best relationship with their CEO and their communityTRANSCRIPT
Liberate Your BoardA Pathway to Policy Governance
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Frustrations of a Board Member
Most operate as a member of a committee of management but are interested in a governance model
Often frustrated with organisational ‘busi-ness’ Thought they were going to make a difference to
their community – but just ended up with more work
Thought they would have a leadership role but ended up one of the workers – and unpaid
Seem to spend (waste) a lot of time talking about operational issues and very little time talking about strategic issues
Need a strategic focus developed in a strategic plan but can’t find the time or the willingness to do it
Concerned about their liability as a board member but not sure how to manage the risk
Not sure what their role is as a board member – the Manager seems to run the show
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Ponderings of a Board Member What actually is the role of the board?
What is my role as a board member?
What is the role of the Manager
How do the two work together?
How do we know if the organisation is going OK?
How well is the board going?
How do we know the Manager is doing a good job?
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How Boards Have Operated in the Past? Spent a lot of time discussing anything that
anyone wants to discuss
Delegating the same job to more than one person
Monitoring performance with no criteria to judge
against
Failing to clarify the most important organisational
value of all – the purpose of the organisation
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Policy Governance Model Is a model of board governance based on the
underlying assumption that the board has the final (and legal) responsibility for the actions, outcomes and outputs of the organisation
The board operates through a set of policies across a range of areas that are implemented by the staff of the organisation who are under the direction of the Manager
The model relies upon the board operating at the strategy and policy level and the staff operating at the operational level – with a clear separation between the two
The board oversees the operations of the Manager by setting limitations representing the values the board see as most important in the way the organisation operates
The linkage between the board and the staff is through the Manager
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Why a Policy Governance Model? Addresses most of the concerns raised by board
members – particularly committee of management members
Provides clear policy statements indicating: The role of the board The role of the Manager The relationship between the two The role of the strategic plan
Provides a proven way of managing risk within the organisation
Improves the efficiency of board management (reduces time)
Makes recruiting board members easier Makes recruiting and employing a Manager more
successful Addresses many of the concerns raised by funding
bodies regarding: strategic direction, risk management governance procedures within applicant
organisations how the organisation minimises risk for the funding
body
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What a model of corporate governance will do The model is applicable:
Whether your organisation has staff or not (but easier if you have)
To startup or continuing organisations To for-profit, not-for-profit and public sector
organisations The model builds powerful boards but is still
attractive to Manager’s because it: Provides greater authority for the Manager Provides greater autonomy and flexibility for
the Manager Provides clear lines of responsibility for the
Manager The model does not create the situation where the
question needs to be asked: Who is running the organisation – the Board or
the Manager?
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Who wins – Who loses
All parties win with a policy governance model
because the roles, responsibilities and
accountabilities are clear (if you don’t like it you
don’t join at the outset). However:
If in the past the board has been rubber
stamping everything the Manager does – then
the Manager loses some power
If the board has been actively involved in
operational management – then the board loses
some power
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Some FAQ’s
How do you run your existing model whilst
developing the new one?
Development and implementation of a policy
governance model cannot be done
incrementally
The new model is developed whilst while
continuing to run your existing model
The changeover occurs when the organisation
is ready
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Some FAQ’s
What policies do we develop first? Role of the board Role of the Manager Relationship between the board and
Manager Strategic objectives
How do we start? Use the generic set of policies provided
and then customise them for your organisation
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Some FAQ’s
Should we hire an outside consultant? Only if the consultant knows the policy
governance model thoroughly Who should lead the process?
The person on the board who is most familiar with the model – this may or may not be the chairperson
Should the Manager lead? The board should not give the role of board
governance to the Manager – the Manager should be involved – but not lead
What happens to our current policies and procedures Tends to work best by discarding current
policies – better with a fresh start
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Some FAQ’s
How long does it take? More than likely – over a period of several months The bulk of the work can be done in 3- 4, three-hour
sessions Is there a way we can ‘try before we buy’?
Yes – develop policies and then see to what extent they address existing issues
Does every board member have to be in favour of the move to policy governance? Adopt the way you usually make board decisions – it
is a board decision! How much detail do we need to include in a
policy? As much (or as little) as it takes for the board and
the Manager to reach a common agreement. Commence with the broad detail and provide more specific detail as required
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Some FAQ’s
How does the adoption of policy governance increase the chance of obtaining government funding?
Clearly shows how the funded project fits into the strategic direction of the organisation
Shows how, by managing risk, your organisation is able to minimise the risk funding bodies have addressing:
Legal risk Commercial risk
Provides for the development of operational procedures including:
Financial management Staff management reporting
How does the adoption of policy governance decrease the time spent at board meetings and increase board effectiveness:
minimising time spent discussing operational issues maximising the time spent on monitoring board
performance Maximising the time spent on organisational performance
and policy development Maximising spent on identifying potential opportunities and
threats and responding to them
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Board Governance Policies Overarching Board Commitment Governing Style Board – Owner Linkage Agenda Planning Role of Chairperson Board member’s Code of Conduct Board Committee Principles Board Member Induction Cost of Governance General Manager Constraint Treatment of Customers Treatment of Staff Financial Planning and Budgeting Financial Status of Dreamtime Child Care Services Emergency Manager Succession Asset Protection Remuneration and Benefits Communication and Support to the Board Public Affairs Unity of Control Accountability of the Manager Delegation to the Manager Monitoring Manager Performance
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Board Governance Policies - Examples
Role of the BoardGoverning Style
The Board will govern with an emphasis on: Outward vision rather than internal pre-occupation Encouragement of diversity of view-points Strategic leadership more than administrative detail Clear distinction between Board and Manager roles Collective rather than individual decision-making Pro-activity rather than reactivity
In the process of doing this: The Board will cultivate a sense of group responsibility. The
Board, not the staff, will be responsible for excellence in governing
The Board will direct, control and inspire the organisation through the careful establishment of broad written policies reflecting the Board’s values and perspectives about ends to be achieved and means to be avoided.
The Board will enforce on itself whatever discipline is necessary to govern with excellence.
The Board will monitor and discuss the Board’s progress and performance at each meeting.
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Board Governance Policies - ExamplesPolicy Type: Role of the ManagerGeneral Manager Constraint The Manager shall not cause or allow any practice, activity,
organisational circumstance or decision that is unlawful, imprudent or that contravenes any ethic specific to Yolla Producers or commonly held business or professional ethic.
Policy Type Relationship Between the Board and the ManagerUnity of Control Only decisions of the Board acting as a body are binding on the
Manager. Accordingly, Decisions or instructions of individual Board members, officers or
committees are not binding on the Manager unless the Board, under rare circumstances, has specifically delegated such authority
Whilst recognising the need for individual Board members to have access to information relevant to their governance responsibilities, the Manager can refuse such requests (or defer them to the Board), when, in the Manager’s opinion, a significant amount of staff time or funds are required, or is disruptive. The Manager will notify the Chairperson when a refusal/deferral occurs.
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Board Governance PoliciesRelationship Between the Board and the
ManagerAccountability of the Manager The Manager is the Board’s only link to the
operational achievement and conduct, so that all authority and accountability of staff, as far as the Board is concerned, is considered the authority and accountability of the Manager. Accordingly: Instructions to persons who report directly or
indirectly to the Manager will be conducted through the Manager
The evaluation or appraisal of staff, either formally or informally, other than the Manager, will only be carried out by the Manager
The Manager’s performance, in general terms, will be appraised against the achievement of organisational objectives subject to the limitations placed on the Manager by the Board through its policies
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Board Governance PoliciesPolicy Type Relationship Between the Board and the ManagerDelegation to the Manager
The Board delegates to the Manager responsibility for the implementation of its operational and strategic objectives whilst complying with its Manager Limitations policies
The board will develop operational and strategic objectives that make clear the results the Board expects the Manager to achieve
The Board will develop, monitor and modify Manager Limitations policies that limit the latitude the Manager may exercise in determining the means by which organisational and strategic objectives may be achieved
The level of detail prescribed in any Board policy will be determined by the degree of information required to ensure the interpretation of policies by the Manager is consistent with the interpretation intended by the Board
The level of detail in board policies may change therefore shifting the boundary between Manager operations and Board operations. But as long as any particular delegation is in place, the Board will respect and support the Manager’s choices of means of implementation
The Manager is encouraged to utilise the knowledge and experience of individual directors on the Board
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Board Governance PoliciesPolicy Type Relationship Between the Board and the Manager Monitoring Manager Performance The Manager’s performance will be continuously, rigorously and
systematically assessed by the Board against achievement of operational and strategic objectives and, compliance with Manager Limitations policies. The Board will provide regular feedback to the Manager.
Monitoring the Manager’s performance is to determine the degree to which Board policies are being met. Only data that is relevant to the Board’s policies will be included in the monitoring process
The Board will acquire monitoring data by one or more of three methods:
By the Manager reporting directly to the Board By an external, independent third party selected by the Board to provide data
regarding compliance with Board policies By direct Board inspection, in which a designated member or members of the
board gather relevant data to assist the Board determine the degree of compliance with Board policies by the Manager
In each case, the standard for compliance shall be any reasonable interpretation of the policy being monitored, by the Manager. That is the Manager’s interpretation consistent with the spirit and intent of the policy by the Board
All policies that instruct the Manager will be monitored at a frequency and by a method chosen by the Board. The Board can monitor any policy at any time and by any method, but will usually depend on a routine schedule
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Getting Started Draft Workshop Agenda Questions The Role of the Board
What is the purpose of the Board? Who is the Board accountable to? How is the Board’s performance monitored and appraised? What is the role of the Chairperson? What is the code of conduct expected of Board members? How can the cost of governance be minimised?
The Relationship between the Board and the Manager What is the role of the Manager? What decisions are binding on the Manager? What is the Manager accountable for and authorised to do? How will the Board instruct the Manager? How will the Board monitor and appraise the Manager’s performance?
Limitations Placed on the Manager by the Board What requirements does the Board have relating to the way activities are
carried out? How are customers/clients treated? How are staff treated? How are finances planned and budgeted for? How is the financial status managed? How is Manager succession managed? How are assets managed and protected? How are internal/external parties (employees, contractors, consultants,
volunteers) compensated? How the Board is kept informed and supported by the Manager? What is the focus of Manager activities?
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Other Legislation
Industrial awards OH&S Workers Compensation Disability Discrimination Privacy Contracts Leases Taxation Superannuation Defamation
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The Board and The Organisation Outward vision rather than internal
pre-occupation Encouragement of diversity of
view-points Strategic leadership more than
administrative detail Clear distinction between Board
and Manager roles Collective rather than individual
decision-making Pro-activity rather than reactivity
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Board Meetings
Reports and reporting Financial Activity Action Plan Strategic direction Committees Decision making Agenda