If you want to spark some healthy conflict in your next conversation with ministry CEOs or senior pastors, throw this verbal grenade into the discussion: “Hey! What do you all think about policy governance?”
I mention this because even though the majority of boards I work with say they function as “policy governance” boards, I don’t believe them—because their micro-managing practices are so blatant.
Book #11:
Boards That Make a Difference: A New Design for Leadership in Nonprofit Organizations, by John Carver
(Order from Amazon)
According to Policy Governance Guru John Carver, “Governing by policy means governing out of policy in the sense that no board activity takes place without reference to policies. Most resolutions in board meetings will be motions to amend the policy structure in some way. Consequently, policy development is not an occasional board chore but its chief occupation.”
Consider John Carver’s insight on what he calls the flaws of “The Approval Syndrome.” They include: reactivity, sheer volume of material, mental misdirection, letting staff off the hook, unfairly putting staff on the hook, short-term bias, lack of clarity in the board’s contribution, and fragmentation (“a sequence of disconnected and unmanageably voluminous vertical slices of the whole…instead of a holistic, manageable fabric of horizontally connected policies”).
He adds, “We all profess that boards should deal with the big picture, but it is difficult to picture the forest by inspecting one tree at a time.”
One of my favorite Carver counter-intuitive commentaries describes what happens when a board delivers a “vote of confidence” for the CEO during a crisis situation.
In Carver’s policy governance bible, Boards That Make a Difference, he writes, “Curiously, there are times when the board goes through the approval process not intending to withhold authority from the CEO but to confirm it. A board might declare its supports for the CEO by cloaking some controversial executive decision with the prestige of the boardroom. Board motivation is usually expressed thus: ‘We want the staff (or others) to know the board is really behind the CEO on this.’ As long as the board and CEO understand that the decision is truly the CEO’s, this approval not only seems harmless but appears to be a healthy show of solidarity.”
Then Carver adds this zinger. “However, such a gesture of board support is called for only if the board has been sending weak signals about the nature of delegation. This kind of support is rarely warranted if the board has made it clear to all that all CEO decisions that are within board-stated bounds are always supported by the board. Official support of a specific action implies that such sporadic backup is necessary, or conversely, that the general philosophy of delegation is weak.”
Carver notes—in his massive 340-page hardback, with another 80 pages of resources and references—that “Board approvals are an unnecessary and dysfunctional method of board control, then, regardless of the ubiquity of the practice.” He goes on—in succeeding chapters—to build the case for “a more proactive, fair, and detrivializing approach to fulfilling the board’s moral and legal obligation to control the organization.”
If no one on the senior team or board of your nonprofit organization or church is familiar with Carver’s brand of policy governance (he invented the term), this is the starting point. Whether you agree or disagree that this board approach is right for your organization, it’s important to understand the continuum of choices available—and to seek consensus on defining your current reality and where your preferred governance future lies.
Interestingly, the book includes an excellent “ends” policy (a big Carver term) from Lancaster County Bible Church—defining the church’s sequential priorities. Evangelism is the church’s first priority.
Note: If 340 pages are a tad too much for you, Carver has a series of booklets, focusing on niche policy governance issues. Another option is to check out the “lean and mean” approach, favored by many including myself, of a 15- to 20-page Board Policies Manual, as described in the book, Good Governance for Nonprofits: Developing Principles and Policies for an Effective Board, by Fredric L. Laughlin and Robert C. Andringa. (See Best Board Books #10.)
BOARD DISCUSSION: Board members can’t always be blamed for governance dysfunction. Sometimes CEOs and senior team members invite confusion when they bring agenda items to the board—in essence, begging the board to micro-manage. Is it clear, in your organization, where the line falls between board decisions and staff decisions?
MORE RESOURCES: Check out the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom, by Dan Busby and John Pearson, including Lesson 36, “Decrease Staff Reporting and Increase Heavy Lifting.”
Note: This is No. 17 in a series of blogs featuring wisdom from the 91-page gem by Max De Pree, Called to Serve: Creating and Nurturing the Effective Volunteer Board.
Max De Pree: “Be a frantic learner. Feel a strong obligation to learn everything you can about your organization’s history, about its vision, its mission, its present circumstances, and the people in it.”
But wait…be a frantic learner about what? And what else?
Here are four more topics where “frantic learning” will pay rich dividends:
#1. Be a frantic learner about Governance 101. Many highly competent people enter board service through the volunteer door and—no surprise—inappropriately wear their volunteer hats in the boardroom and—without thinking—wear their governance hats when volunteering. Be a frantic learner and view the ECFA Governance Toolbox Series No. 2: Balancing Board Roles—Understanding the 3 Board Hats: Governance, Volunteer, Participant.
#2. Be a frantic learner about policy governance. Some boards claim they operate with a “Policy Governance®” model, but in my experience, few do. (And not every board should.) I encourage boards to understand the continuum between “Policy Governance®” and hands-on/in-the-weeds board governance. At least one person on your board should be a frantic learner and read Boards That Make a Difference: A New Design for Leadership in Nonprofit Organizations, by John Carver.
#3. Be a frantic learner about dating board prospects. Inviting a friend-of-a-friend-of-Cousin Eddie to serve on your board (“He is wealthy!”) might fill a slot at the last minute, but the best boards take 18 to 36 months to “date” board prospects before proposing marriage. Be a frantic learner and view the ECFA Governance Toolbox Series No. 1: Recruiting Board Members—Leveraging the 4 Phases of Board Recruitment: Cultivation, Recruitment, Orientation and Engagement.
#4. Be a frantic learner about spiritually discerning God’s voice. It’s possible that your board is skilled at decision-making, but not discernment. Bill Hybels notes, “…I meet many people who claim to have never heard the promptings or whispers of God. Not even once. Sometimes when I probe a little deeper, I discover that their lives are so full of noise that they can’t possibly hear the Holy Spirit when he speaks.”
So when your board is faced with that critical fork-in-the-road decision when you must spiritually discern God’s voice—what if your board is made up of individuals, who in their own lives “have never heard the promptings or whispers of God?” Big problem! Be a frantic learner and read The Power of a Whisper: Hearing God. Having the Guts to Respond, by Bill Hybels.
BOARD EXERCISE: Before you order your next “everyone read this book before the board retreat,” take time to discern where frantic learning is needed. Seek God’s voice—not the hype from the bestsellers list.
To order from Amazon, click on the title for: Called to Serve: Creating and Nurturing the Effective Volunteer Board, by Max De Pree, (Wm. B. Eerdmans Publishing Company).
Note: This is No. 12 in a series of blogs featuring wisdom from the 91-page gem by Max De Pree, Called to Serve: Creating and Nurturing the Effective Volunteer Board.
Max De Pree: "It is also important to formulate guidelines that bring coherence between the vision and mission of the organization and the way strategic planning is developed to reflect them.”
In a phone call this morning, a client and friend mentioned to me again how helpful the “corral” metaphor has been as he coaches CEOs and board members about the policy-making role of the board.
I began using the “corral” language after reading John Carver’s immense, 418-page treatise on Policy Governance®, Boards That Make a Difference: A New Design for Leadership in Nonprofit Organizations. (You may prefer his 26-page summary, Basic Principles of Policy Governance.) In his four-point approach to governance, Carver notes that “Board decisions should predominantly be policy decisions.”
Max De Pree says boards must establish guidelines for the organization and the CEO. Carver labels them “executive limitations” (a corral). “The board establishes the boundaries of acceptability within which staff methods and activities can responsibly be left to staff. These limiting policies, therefore apply to staff means rather than to ends.”
You’ll find similar themes in another helpful resource, Good Governance for Nonprofits: Developing Principles and Policies for an Effective Board, by Frederic L. Laughlin and Robert C. Andringa.
Whatever your view of Carver's approach, or other models of governance, you must agree that a “corral” is a brilliant way to describe policies, guidelines or boundaries.
The board sets the fences to the corral—thereby giving the CEO and senior team clarity on what needs, or does not need, board approval or even reporting. CEOs, however, must report when policy has been violated. “You should know that last Friday, I had to operate outside the corral due to the following extenuating circumstances.”
When a board hears that, it has three options: 1) enlarge the corral and affirm the CEO for good judgment; or 2) caution the CEO that the fencing will remain intact and not to violate the policy again; or perhaps 3) make the corral smaller—tighten the policy.
De Pree says that board policies/guidelines must inspire fertility and fruitfulness. “While your board should insist on a high degree of focus, it should also be giving the kind of guidance that will result in the natural fecundity of a well-run operation.”
I confess: I looked it up at dictionary.com! “Fecund and its synonyms ‘fruitful’ and ‘fertile’ all mean producing or capable of producing offspring or fruit—literally or figuratively…noun…the quality of being fecund; capacity, especially in female animals, of producing young in great numbers…fruitfulness or fertility, as of the earth…the capacity of abundant production: fecundity of imagination.”
CEOs and board members of Christ-centered organizations understand the power of guidelines. We affirm and live by the clarity of the 10 commandments (the boundaries are crystal clear!). Yet we also live by grace and we do want policies/corrals that unleash creativity and fruitfulness to Kingdom ends. Thus, in our personal lives and in our governance lives, we need discernment to operate ethically, spiritually, and fruitfully.
BOARD EXERCISE. Divide into three or four teams at your next board meeting and invest 20 minutes on these questions: Is our policy document (corral) current and crystal clear? Does it result in the natural fecundity of a God-honoring organization?
To order from Amazon, click on the title for: Called to Serve: Creating and Nurturing the Effective Volunteer Board, by Max De Pree, (Wm. B. Eerdmans Publishing Company).
There is a wide continuum of beliefs concerning the board member’s role in fundraising. Policy Governance® zealots warn against board committees that replicate staff work. According to John Carver, “Board committees are to help get the board’s job done, not to help with the staff’s job.” You may disagree—and that’s OK.
Whether you’re discussing fundraising in your board meeting, or wearing your volunteer hat to suggest improvements, it’s 100 percent certain you’ll be talking about fundraising when your year-end results are in. (Was it a thumbs-up or thumbs-down year?)
So…for what it’s worth, here’s my list of 10 fundraising mistakes I notice frequently. The good news—all 10 are fairly easy to fix. I’m not suggesting you put these on the board agenda (it’s staff work, not board work)—but from a board policy perspective, who owns the annual evaluation of your fundraising program?
Here are the first five mistakes:
MISTAKE #1: Donor letters that thank every person for their faithful giving—when, in fact, the letter is also sent to non-donors! (Easy Fix: segment your list into donors and non-donors.)
MISTAKE #2: A donor gives a gift to the ABC program, but the president’s generic thank you letter highlights the XYZ program. (Easy Fix: segment your thank you letters to appropriately report on progress for the specific gift given.)
MISTAKE #3: When a donor gives online, the emailed receipt is inappropriately designed for product purchases with a “shipping and handling” line, etc. (Easy Fix: use online giving software. Using a "one-size fits all" software program only communicates to donors that you don’t have your act together. Board members: give an online gift today--and assess the quality of the giving experience, and the receipting process.)
MISTAKE #4: When Mary Smith receives an appeal letter, or a thank you letter, addressed to “Dear Mrs. Smith,” but the CEO calls her by her first name, “Mary,” it’s one more indication that there is a sloppy, undisciplined development approach. (Easy Fix: customize every donor record. Good software will help you do this.)
MISTAKE #5: Focusing on the year-end tax benefits of giving versus the importance of the ministry’s work and results. When we appeal to tax-saving versus soul-saving, we miss the opportunity to disciple donors in what Wes Willmer calls the “Revolution in Generosity.”
Watch for the other five mistakes in the next blog.
QUESTION: When is the last time your board asked for an evaluation of your fundraising program and practices?
