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