GAINING EFFICIENCY AT THE BOARD LEVEL

by

Caroline Oliver

Particularly when time and money are short, organisations look for efficiency gains.  Typically boards’ contribution to this effort is simply to express the level of need and urgency for efficiency gains to be found wherever possible.   In this article, I want to suggest that boards can make a far bigger contribution – if they start by looking to themselves.    

I am not talking here about shaving a few pennies off the cost of board members’ travel.  I am talking about how the board can make a substantive difference to the efficiency of the whole organisation by looking at any gap in alignment between itself and the rest of the organisation. 

For example, how much did it cost your organisation last year:

·         To produce answers to board questions that did not advance the organisation?

·         To produce board reports of which there was no meaningful review?

·         To redo proposals because the board had not identified what it wanted in the first place? 

·         To repeat discussions of items that should have been resolved and stayed resolved?

And, conversely, what could have been the efficiency gains if your board had provided:

·         Clear sustainable direction around which the whole organisation and those to whom it is legally and morally accountable could be aligned?

·         An efficient and meaningful system for tracking progress against that direction?

·         The basis for clear and accountable delegation to get the job done based on role clarity and maximum empowerment?

Having done this analysis, you should have a pretty good idea of the scope for gaining efficiency at the board level.  Next comes the question of how best to make the necessary changes. 

The only tool I know of that offers boards the possibility of achieving an entirely new level of efficiency is Policy Governance®1 originally developed by John Carver and set out in his most well-known book “Boards that Make a Difference”2 – now in its third edition.

The approach is simple:

1)      A board needs to know on whose behalf it is governing – its legal and moral “owners”.

2)      A board needs to pre-state all its expectations of itself and its delegates on behalf of its owners.

3)      A board needs to monitor and evaluate performance against its expectations in order to fulfil its accountability to its owners.

Simple in theory, yes, but a little more complicated in practice.   The Policy Governance approach does not tell your board what to think or how to operate, only how to organise what it thinks and how it decides to operate.  Thus it is similar to a computer operating system upon which many different specific applications can be run, or a calendaring system within which many different lives can be lead.   It is in this sense that the Policy Governance approach can be said to be universal – applicable to the work of any board.

Organising for board efficiency using Policy Governance means having:

1)      A planned programme of activities to link your board and your owners.

 

2)      A comprehensive but  brief policy manual that contains all your board’s policies (values/expectations) regarding its own operation and delegation to others, and most importantly:

 

a.       The reason for your organisation’s existence in terms of strategic outcomes or Ends (specific impacts on specific people’s lives at a specific worth)

 

b.      Safeguards against risks to your organisation’s business and ethical health.

 

3)      Regular evidenced assurance that your Chief Executive is operating within any reasonable interpretation’ of board policy.   In the form of:

 

a.       Compliance standards for fulfillment of every policy – explicit and justified

 

b.      Data on same

As with any programme of change, it takes work to install such a system, it takes discipline to stick with such a system and you have to judge whether the potential gains in efficiency are worth the effort.   From my own experience of working with boards using Policy Governance over the past 15 years, I can only report that the board members and chief executives I know who have made the change fully, would not dream of going back to what they would now regard as a most haphazard and therefore illusory and inefficient kind of control.   

Efficiency requires the bringing together of all your organisation’s people, elements and subsystems to meet your organisation’s goals.  In other words efficiency requires alignment - the optimising of the relationship between your organisation’s owners, board, management and staff - to fulfil a common purpose.  I believe that such alignment rightfully starts with your board as properly empowered by your organisation’s owners to define your common purpose.  What do you think?

 

1 Policy Governance® is an internationally registered service mark of John Carver. Registration is only to ensure accurate description of the model rather than for financial gain.  The model is available free to all with no royalties or licence fees for its use.  The authoritative website for Policy Governance is www.carvergovernance.com.

2 Boards That Make a Difference: A New Design for Leadership in Nonprofit and Public Organizations (Jossey-Bass, 1990; 2nd edition, 1997; 3rd edition, 2006). By John Carver.

© Caroline Oliver, Good to Govern, 2010                                                                       www.goodtogovern.com