Policy Governance®

Policy Governance®, also known as Carver Governance, was developed by Dr. John Carver and is a leading-edge integrated operating system for boards that incorporates the following key elements:

• Accountability of the governing board to those key stakeholders on whose behalf the board governs, that is, shareholders or those in a position equivalent to shareholders of a for-profit corporation
• Setting of organizational purpose and performance expectations
• Delegation that empowers management to operate within boundaries clearly established by the board, and
• Monitoring of organizational performance to ensure that the board's expectations are being met.

The 10 powerful principles of the Policy Governance® model promote the following:

• A results-driven organization with clarity of organizational purpose
• A system for effective ongoing monitoring and evaluation of CEO performance
• Clarity of roles, authority and accountability: board, individual board members, board officers, CEO, and staff
• Clarity of relationship between CEO and board chair
• Empowerment of CEO and staff within clearly defined boundaries
• Effective organizational control without board micromanagement
• Board committees supporting the work of the board
• Board meetings that focus on the really important governance matters.

Not surprisingly, within Policy Governance®, board policies occupy a central place. Board policies define the expectations of the board for itself and for management. There are four categories of policies:

Ends Policies. These policies define the impact or results the organization intends to produce, for which people and at what cost or worth. The board’s thinking about Ends is informed by its ongoing interaction with the organization’s “owners” – those persons on whose behalf the board governs and to whom it is accountable.

Executive Limitations Policies. These policies provide the boundaries within which the CEO is empowered to operate the organization. Such policies specify situations and activities that are not permissible and are to be avoided in such areas as treatment of customers, personnel, finance, asset management, and communication and support for the board.

Governance Process Policies. These policies specify expectations regarding the board’s own structure and process and may include policies such as the board job description, board code of conduct, board officers, board committees, and board agenda development.

Board-Management Delegation Policies. Such policies define the relationship between the board and management and may include policies such as delegation to management, accountability and evaluation of the CEO, and CEO recruitment.

With clear policies in place, the Board delegates operational authority to the CEO and holds the CEO accountable for the achievement of Ends and for the avoidance of unacceptable situations and activities. Comprehensive ongoing monitoring is in place to ensure compliance with the board’s expectations.