organised governance or organised chaos

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    An investigation of the 7 division organising board as a tool for organising compliance and

    conformance out of chaos.

    ORGANISING BOARD

    ORGANISED GOVERNANCE OR ORGANISED CHAOS

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    ORGANISING

    BOARDORGANISED GOVERNANCE OR

    ORGANISED CHAOS

    CONTENTS

    Organising Governance ......................................................................................................................... 1

    Organising Board ................................................................................................................................... 2

    Governance Theory ............................................................................................................................... 2

    Governance Modes ............................................................................................................................... 4Governance Models ............................................................................................................................... 4

    Chaos to Compliance............................................................................................................................. 5

    Appendix 1 ............................................................................................................................................. 6

    Nimitz 7 Division Organising Board .................................................................................................... 6

    Bibliography ......................................................................................................................................... 15

    ORGANISING GOVERNANCE

    I will investigate the 7 Division Organising Board in relation to

    Governance Theory, Governance Modes and Governance Models

    to prove it practical in a non-profit organisation; that it stops our

    board from being bored when the agenda turns to governance.

    DOING THINGS

    RIGHT TO DO

    THE RIGHT

    THING

    Governance is the process

    of providing strategic

    leadership to a non-profitorganisation. It entails the

    functions of setting direction,

    making policy and strategy

    decisions, overseeing and

    monitoring organisational

    performance, and ensuring

    overall accountability. Non-

    profit governance is a

    political and organisational

    process involving multiple

    functions and engaging

    multiple stakeholders.

    (Renz, n.d.)

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    ORGANISING BOARD

    The Organising Board is a resource allocation tool that was first used by Admiral Nimitz to organise

    and man up the U.S. Navy during World War II. (Morton, 1989). L. Ron Hubbard who had served in

    the U.S. navy under Nimitz adapted it to build the Church of Scientology and from there it migrated

    into the business world. It has been adapted and adopted by the corporate world. I have used itwhile consulting in organisations such as Sony, Chick Corea/Mad Hatter Studios, Stirling Software,

    Fitness Choice, Neaumann Engineering, et al. Full details of it are found in Appendix 1

    GOVERNANCE THEORY

    Our particular non-profit follows Carvers Policy Governance Theory with some overtones of Christian

    Stewardship (Jeavons, 1994), Stakeholder (Freeman, 2010) and Team Production (Blair, March 1999)

    theories.

    We largely inherited our policies and procedures from our parent organisation located in Americus,

    Georgia, U.S.A. We have adapted them for Australian laws and corporate governance guidelines as set

    out by the Australian Charities and Not-For-Profits Commission. (Australian Tax Office, 2013). The

    parent organisation set out the Operational Policy and Procedures Manual using Carvers Policy

    Governance model. Carvers Policy Governance is a radical and effective change in the way boards

    conceive of and do their job. It allows greater accountability. Board leadership isn't just rhetoric. It's a

    reality. Policy Governance, an integrated board leadership paradigm created by Dr. John Carver, is a

    groundbreaking model of governance designed to empower boards of directors to fulfill their obligation

    of accountability for the organisations they govern. (Carver, 1996). It is basically applicable to the

    governing board of any organisation across all sectors. The model enables the board to focus on thelarger issues, to delegate with clarity, to control management's job without meddling, to rigorously

    evaluate the accomplishment of the organisation and to truly lead.

    In contrast to the approaches typically used by boards, Policy Governance separates issues of

    organisational purpose (the ends) from other organisational issues (the means). Policy Governance

    boards demand accomplishment of purpose, and only limit the staff's available means to those which

    do not violate the board's pre-stated standards of prudence and ethics.

    The board's means are defined in accordance with the roles of the board, its constituents, the

    president/chairperson, management officers, and any committees the board may set up to help it

    accomplish its purpose. Thus the board "speaks with one voice". Dissent is expressed during thediscussion preceding a vote. Once taken, the board's decisions may subsequently be changed, but will

    not be undermined. The board's expectations set out rules regarding the delegation of authority to the

    staff or volunteers and the method by which criteria will be used for evaluation. There is then no

    confusion about who is responsible to the board or for which board expectations they are responsible.

    This focused approach reduces the level of paperwork that boards often feel obliged to review. Boards

    sometimes are concerned that they are only given the data that management wants to give them.

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    Under Policy Governance they find that, in laying out their expectations and demanding a relevant and

    credible accounting of performance, they have effectively taken over control of their major information

    needs. It could be argued that Policy Governance grew out of Agency Theory because principal - agent

    analysis generally assumes that the problem of interest is getting the agent to do what the principal

    wants. Studies of this problem usually do not address the opposite possibility that the agent might

    have trouble getting the principal to perform their end of the deal. Nor do they address situations inwhich part of the agent's job is to figure out what needs to be done. Policy Governance overcomes the

    shortfalls of Agent Theory by setting out the ends and the meanswhat is expected and how it will be

    evaluated.

    Christian Stewardship Theory (Jeavons, 1994) explores the question What makes an organisation,

    what it does and the way it does it, Christian? Effective Christian organisations acknowledge a

    dependence on God for the work they do relying on the wider Christian world for people and funding

    resources, making them accountable. Most effective Christian organisations have been and remain

    program-driven, not funding-driven (Jeavons 1994, p143). High levels of integrity guide how funding is

    sought and used. Our particular organisation for example will not accept funds from sources which itperceives as not supportive of Christian living principles. Scholars have long recognised stewardship as

    a key component to relationship management for nonprofit organisations. Jeavons (1994) described the

    concept of stewardship as having ancient (even biblical) roots, and noted that nonprofit organisations,

    in particular, have an obligation to be good stewards of their resources because they are entrusted with

    those resources to benefit the public good.

    The stakeholder concept was originally defined as "those groups without whose support the

    organisation would cease to exist." The list of stakeholders originally included shareowners,

    employees, customers, suppliers, lenders and society. (Freeman, 2010) In the nonprofit sector the list

    of stakeholders is extended to include donors, volunteers, clients and the community served.

    Using Team Production Theory, Blair puts forward the notion that public corporation law can offer a

    solution to team production problems because it allows rational individuals who hope to profit from team

    production to overcome shirking and profit-seeking by opting into an internal governance structure that

    she calls the "mediating hierarchy." In essence, the mediating hierarchy solution has team members

    give up important rights (including property rights over the team's joint output and over team inputs

    such as financial capital and project-specific human capital) to a legal entity created by the act of

    incorporation. In other words, corporate assets belong not to team members but to the corporation

    itself: Within the corporation, control over those assets is exercised by an internal hierarchy whose job

    is to coordinate the activities of the team members, allocate the resulting production, and mediate

    disputes among team members over that allocation. At the peak of this hierarchy sits a board ofdirectors whose authority over the use of corporate assets is virtually absolute and whose

    independence from individual team members is protected by law. Corporate law views directors as

    more than mere "agents." Rather, they are