In our previous Tips for Effective Boards, we discussed the first five of the Ten Principles of the Policy Governance® model of board operations.  We now turn to the sixth Policy Governance® principle, Executive Limitations Policies.

I believe this element of the Policy Governance® model is one of the most creative aspect of the model.  Both board control and CEO empowerment are achieved by creating boundaries through board policies.  Such boundaries establish clarity for the CEO regarding what is allowed and what is not allowed.  The policies that create the boundaries state what the CEO is prohibited from doing or allowing while anything not prohibited is then allowable for the CEO.  Board control is maintained by rigorously monitoring CEO and organizational performance with respect to the established boundaries.  So, instead of the board telling the CEO what he or she must do, the board empowers the CEO to make operational decisions as long as he or she avoids what the board has prohibited.  The policy language is negative but the effect in terms of CEO empowerment is quite positive. 

To be clear, in the Policy Governance® model, there are two broad types of policies and policy issues – Ends and Means.  As discussed previously, Ends define organizational purpose in terms of what good or benefit, what outcome is to be provided for what persons and the worth of those results produced.  All other policies and policy issues are referred to as Means.  So, in Policy Governance®, Executive Limitations policies control operational means.

John Carver and Miriam Carver have articulated the Executive Limitations Policy principle as follows:

“Executive Limitations:  The board defines in writing its expectations about the means of the operational organization.  However, rather than prescribing board-chosen means – which would enable the CEO to escape accountability for attaining Ends, these policies define limits on operational means, thereby placing boundaries on the authority granted to the CEO.  In effect, the board describes those means that would be unacceptable even if they were to work.  These are called Executive Limitations policies.  (“Policy Governance® Source Document” produced by the International Policy Governance Association in consultation with John Carver and Miriam Carver, 2011:  https://www.BoardsOnCourse.com/policy-governance.)     

Examples of policies that may be included within a board’s Executive Limitations policies include the following:

1.       General Policy on the Limitation of Executive Authority

2.       Treatment of Consumers

3.       Treatment of Staff

4.       Financial Planning and Budgeting

5.       Financial Condition and Activities

6.       Emergency CEO Succession

7.       Asset Protection

8.       Compensation and Benefits

9.       Communication and Support to the Board

10.   Ends Focus of Grants and Contracts

So, a total of about ten Executive Limitations policies provides comprehensive direction to the CEO by creating the boundaries within which the CEO is expected to operate.  All operational policies under the authority of the CEO are expected to be in compliance with these ten or so Executive Limitations policies.  It’s obviously much more manageable for the board to focus on these few policies to control all of operations and to provide boundaries within which the CEO is empowered to make all operational decisions (as long as these decisions don’t violate these boundaries).  Hence, policies that create boundaries enable the board to be in control of operations while empowering the CEO and avoiding the board micromanaging operations within those boundaries.

Boards don’t have to start from scratch in developing these policies.  Template board policies have been developed by John Carver and Miriam Carver.  (See their book Reinventing Your Board:  A Step-by-Step Guide to Implementing Policy Governance.  Revised Edition.  San Francisco, California:  Jossey-Bass.  2006, pages 233-268.)  In addition, the most recent versions of these template policies are available from consultants who have completed the Policy Governance® Academy^sm.  I have completed this training and have the Carvers’ permission to use these template policies in my consulting.  Other Policy Governance® consultants with this training can be identified through Govern for Impact’s “Find a Consultant” service.  (www.governforimpact.org)

If you are interested in sample board policies not following the Policy Governance® model, these are available from BoardSource publications such as The Handbook of Non-Profit Governance.  Jossey-Bass. 2010, Pages 331-358.  (www.boardsource.org)  Whether you choose to follow the Policy Governance® model or not, there is great value in having perhaps 25 board-level policies separate from perhaps 100s of operational-level policies.   Such board-level policies express the board’s expectations for itself and also provide direction to the CEO for all operational-level policies.  (Note: Sample board policies that do not follow the Policy Governance® model may not make the same distinction between board-level policies and operational-level policies that Policy Governance® makes.)

For additional information about this principle, please check out Tips for Effective Boards #55:  How to Avoid Rubberstamping and Micromanaging:       https://www.BoardsOnCourse.com/blog.   

To see all ten principles of the Policy Governance® model, please click  https://www.BoardsOnCourse.com/policy-governance and then click The Principles of Policy Governance® on the left-side menu.