The Magic Behind Board Policy Development

Any of you who are even occasional readers of our blog posts will know that most of them concern practices in local government across Canada. While this comprises the bulk of work that Strategic Steps does, the second largest client group is non-governmental organizations that are led by governance boards. Today’s exploration is about the importance of creating and maintaining a skeleton of documentation that enables the boards to remain as effective as they can be.

Provincial or territorial legislation under which governance boards are stood up differs depending on the jurisdiction in which the board is incorporated. The primary difference being corporate governance boards vs non-governmental organization governance boards. While the return on investment for corporations is usually financial the same cannot be said of other groups. In those cases, the return is often a social one, though sustainable financial performance does enable that to occur.

Focusing on Role Clarity

Once established as an organization, a large part of the board’s focus turns to creating standard operating procedures, known most of the time as ‘policy’. The creation of policy is time consuming at the start, but if done well and comprehensively, it will save hours of repetitive decision making later on.

Governance boards are often called ‘policy governance boards’ because they are driven by policy, and the board as a very specific role to play in ensuring that a comprehensive policy manual is created and kept current.

It is important for a true governance board to stay out of the actual writing of the policy because that is not why the board members were ‘hired’. Boards rely on their staff to draft policy based on the board’s direction. If the organization needs a policy in CEO succession for example, they can direct their manager to draft the policy for the board to consider, edit, and eventually approve.

It is then up to the manager to implement and monitor the policy, and to bring it back to the board when changes might need to be made or when its ‘review by’ date approaches.

Maintaining Currency of Policy

All policies should be reviewed periodically, even if no changes are required. This way, new board members will become aware of the policy's existence, and continuing board members will be reminded of it.

Many policies have a lifespan, and the regular review will enable the board to rescind policies that are no longer needed. By doing that, the board can eliminate confusion that might be generated when active board policies conflict with each other, with a revised mission for the organization, or with evolving legislation from various governments.

When we are asked to work with an organization on creating or updating a policy manual, we often start with a draft table of contents, so we can provide the governance board with an idea of where they might have policy gaps to address. Not all the topics that appear in our draft table of contents will be required by all boards, but it’s a good place to start. If you, reader, would like to see what that looks like, please email me and I can send you this table of contents.

Why Policy?

In one of my books, I explore the rationale behind having policies in the first place. To me, the idea of having policy in place are several, all of which fulfill values that board members frequently identify as important:

• Accountability: We have policy so that members of the board and management can be held accountable for decisions that are made in alignment with that policy, and we can be held to task for decisions that go against our stated policy.

• Predictability: Anyone who reads the relevant policy knows how the board – and the organization – is going to act or react in a specific situation.

• Transparency: Policy indicates what the board and the organization value and how those values are being implemented.

• Efficiency: Rather than management having to ask the board the same question over and over, policy will pre-decide a course of action and allow the board to focus on other aspects of good governance.

Taken together, the value of having (and understanding) policy can’t be overstated. It allows members of a governance board to carry out their responsibilities framed within their role as governors. This ultimately remains in support of the organization adding as much value as possible to its membership and often to the wider community.

Finally

If you have comments about the need for, and value of, a governance board being supported by policy, you can reach me at ian@strategicsteps.ca .

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