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CCP 06-24-2002
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CCP 06-24-2002
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<br />The Policy Govemanee@ Model <br /> <br />Page 3 of 16 <br /> <br />even undesirable performance. It is rather like removing a few components from a watch, yet <br />expecting it still to keep accurate time. Unlike the traditional practices to which boards have become <br />accustomed, the Policy Governance model introduces an integrated system of governance (Carver <br />and Carver, 1996; Carver, 1997). <br /> <br />Greater effectiveness in the governing role requires board members first to understand qovernance <br />in a new way. then to be ~isciolined enouGh to behave in a new wav, Boards cannot excel if they <br />maintain only the discipline of the past any more than managers of this new century can excel if they <br />are only as competent as those of the past. Does this ask too much of boards? Perhaps it does ask <br />too much of many of today's board members. Yet there are other board members-or potential <br />board members who thus far have refused to engage in either the rubber-stamping or the <br />micromanaging they see on boards-who would rejoice in greater board discipline. <br /> <br />The Policy Governance model requires that boards become far more enlightened and more <br />competent as groups than they have been. If that means losing some board members as the <br />composition of boards goes through change, then the world will be the better for it. The Polir.y <br />Governance monel is not desi']npn to please today's board members or today"s manaqers. It is <br />designed to give orgaoizations' true owners competent servant-leaders to govern on their behalf. <br /> <br />Board as Owner-Representative and Servant-Leader <br /> <br />In the business sector, we can easily see that a board of directors is the voice of the owners <br />(shareholders) of the corporation. It is not always apparent that nonprofit organizations also have <br />owners. Certain nonprofits, such as trade associations or professional societies, are clearly owned <br />by their members. Beyond such obvious cases of ownership, however, it is useful to conceive that <br />community-based agencies in the social services. health, education, and other fields are "owned" by <br />their communities. In neither trade associations nor community agencies is there is a legal <br />equivalent of shareholders, but there is a moral equivalent that we will refer to as the "ownership." <br />Looking at ownership in this very basic way. it is hard to conceive of any organization that isn't <br />owned by someone or some population, at least in this moral sense. <br /> <br />The Policy Governance model conceives of the governing board as being the on-site voice of that <br />ownership. Just as the corporate board exists to speak for the shareholders, the nonprofit board <br />exists to represent and to speak for the interests of the owners. <br /> <br />A board that is committed to representing the interests of the owners will not allow itself to make <br />decisions based on the best interests of those who are not the owners. Hence. boards with a sense <br />of their legitimate ownership relationship can no longer act as if their job is to represent staff. or <br />other agencies, or even today's consumers (we will use that word to describe clients, students, <br />patieots, or any group to be impacted). It possible that these groups are not part of the ownership at <br />all, but if they are, it is very likely they constitute only a small percentage of the total ownership. <br /> <br />We are not saying that current consumers are unimportant. nor that staff are unimportant. They are <br />critically important, just as suppliers, customers, and personnel are for a business. It is simply that <br />those roles do not qualify them as owners. They are due their appropriate treatment. To help in their <br />service to the ownership, Policy Governance boards must learn to ,distinGuish between owners and <br />customer!;;. for the interests of each are different. It is on behalf of owners that the board chooses <br />what Grouos will be the customers of the future. The responsible board does not make that choice <br />on behalf of staff, today's customers, or even its own speCial Interests. <br /> <br />Who are the owners of a nonprofit organization? For a membership orgaoization, its members are <br />the owners. For an advocacy organization. persons of similar political, religious. or philosophical <br />conviction are the owners. There are many variations. But for purposes of this paper, we will <br />assume a community organization. such as a hospital, mental health or family service agency. for <br />which we can confidently say that the community as a whole is the legitimate ownership. In this <br />case. it is clear that in a community organization. the board must be in a position to understand the <br /> <br />http://www.carvergovcrnancc.com/model.htm <br /> <br />6/] 2/2002 <br /> <br />. <br /> <br />. <br /> <br />. <br />
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