Board Monitoring and Evaluation: The Basicswith PhilGraybeal … · 2014. 5. 21. · 1....

Board Monitoring and Evaluation: The Basicswith Phil Graybeal

Friday (1:45-3:00) and Saturday (8:30-10:00)

When it comes to Board self-assessment, many questions arise. What board means policies must aboard have to effectively do its own work? How does a board meaningfully examine its owntrustworthiness as a governing body? What does continuing education look like for a board? Ideas foraddressing each of the above questions will be presented and further insights offered from attendingparticipants.

Session agenda:

1. Introductory thoughts on importance of the board's job (10 min)

2. Review of selected policies regarding Board Means -discussions to promote familiarity with the

key policies and bring forth ideas about how to evaluate board effectiveness (30 min)

3. Sample board meeting review (5 min)

4. Possible ingredients of an annual work plan (10 min)

5. Identify available Board resources for continuing education (5 min)

6. Question and Answer (15 min)

THIS INSTRUCTIONALTOOL IS FOR USE WITH 1RAINED GUIDANCEWITHIN THE POLICY GOVERNANCE® MODEL.1

POLICY TYPE: GOVERNANCE PROCESS

POLICY TITLE: GLOBAL GOVERNANCE COMMITMENT

The purpose of the board, on behalf of (identify the ownership here], is to see to it that [name of organizationhere] (a) achieves appropriate results for appropriate persons at an appropriate cost (as specified in board Endspolicies), and (b) avoids unacceptable actions and situations (as prohibited in board Executive Limitationspolicies).

THE "MORAL OWNERSHIP" IDENTITY IS TO BE INSERTED IN THE BLANK PROVIDED. THIS COULD BE "GENERALPUBLIC,""PEOPLE OF MONTGOMERY COUNTY," "MEMBERSHIP," "CITIZENS OF SAN FRANCISCO," "PERSONSCONCERNED ABOUT X," OR OTHER SUCH BASE OF OWNERSHIP.

© John and Miriam Carver. Copying permitted for non-commercial purposes if attributed to John and Miriam Carver.John Carver' Phone 404-728-9444, [email protected], www.carvergovemance.com

Miriam Carver' Phone 404-728-0091, [email protected], www.carvergovemance.com

THIS INSTRUCTIONAL TOOL IS FOR USE WITH TRAINED GUIDANCE WITHIN TIIE POLICY GOVERNANCE® MODEL.


2

POLICY TITLE: GOVERNING STYLE

The board will govern lawfully with an emphasis on (a) outward vision rather than an internal preoccupation, (b)encouragement of diversity in viewpoints, (c) strategic leadership more than administrative detail, (d) cleardistinction of board and chief executive roles, (e) collective rather than individual decisions, (f) future rather thanpast or present, and (g) proactivity rather than reactivity.

Accordingly:

1. The board will cultivate a sense of group responsibility. The board, not the staff, will be responsiblefor excellence in governing. The board will be the initiator of policy, not merely a reactor to staffinitiatives. The board will not use the expertise of individual members to substitute for the judgmentof the board, although the expertise of individual members may be used to enhance theunderstanding of the board as a body.

2. The board will direct, control and inspire the organization through the careful establishment of broadwritten policies reflecting the board's values and perspectives. The board's major policy focus will beon the intended long-term impacts outside the staff organization, not on the administrative orprogrammatic means of attaining those effects.

3. The board will enforce upon itself whatever discipline is needed to govern with excellence.Discipline will apply to matters such as attendance, preparation for meetings, policymakingprinciples, respect of roles, and ensuring the continuance of governance capability. Although theboard can change its governance process policies at any time, it will observe those currently in forcescrupulously.

4. Continual board development will include orientation of new board members ill the board'sgovernance process and periodic board discussion of process improvement.

5. The board will allow no officer, individual, or committee of the board to hinder or be an excuse fornot ful:fillinggroup obligations.

6. The board will monitor and discuss the board's process and performance at each meeting. Self-monitoring will include comparison of board activity and discipline to policies in the GovernanceProcess and Board-Management Delegation categories.

© John and Miriam Carver. Copying permitted for non-commercial purposes if attributed to John and Miriam Carver.John Carver' Phone 404-728-9444, [email protected], www.carvergovemance.com

Miriam Carver' Phone 404-728-0091, [email protected], www.carvergovemance.com

THIS INSTRUCTIONAL TOOL IS FOR USE WITH TRAINED GUIDANCE WTI1llN TIlE POLICY GOVERNANCE® MODEL.


3

POLICY TITLE: BOARD JOB DESCRIPTION

Specific job outputs of the board, as an informed agent of the ownership, are those that ensure appropriateorganizational performance,

Accordingly, the board has direct responsibility to create:

1. The link between the ownership and the operational organization.

2. Written governing policies that address the broadest levels of all organizational decisions andsituations.

A. Ends: Organizational products, impacts, benefits, outcomes, recipients, and their relativeworth (what good for which recipients at what cost/priority).

B. Executive Limitations: Constraints on executive authority that establish the prudence andethics boundaries within which all executive activity and decisions must take place.

C. Governance Process: Specification of how the board conceives, carries out and monitors itsown task.

D. Board-Management Delegation: How power is delegated and its proper use monitoredincluding, if applicable, the CEO role, authority, and accountability.

3. Assured successful organizational performance on Ends and Executive Limitations.

[A BOARD CAN SET ANNUAL TARGETS ABOUT INTEGRITY OR COMPLETENESS IN THESE AREAS EITHER BY EXPANDING THISPOLICY OR ESTABLISHING A SEPARATE POLICY TITLED, FOR EXAMPLE, "ANNUAL GOVERNANCE PLAN."]

[OTIIER JOB "PRODUCTS" OF TIIE BOARD WHICH MAY BE APPROPRIATE FOR SOME ORGANIZATIONS MAYINCLUDE, E.G., "LEGISLATIVE CHANGE," "DONOR FUNDING," OR OTIIER OUTPUTS FOR WHICH TIIE BOARDCHOOSES TO HOLD ITSELF DIRECTLY RESPONSIBLE.]

[BE SURE TO INCLUDE ANY DECISION AREAS THAT EXECUTIVE LIMITATIONS POLICmS HAVE DENffiD TO THECEO.]

© John and Miriam Carver. Copying permitted for non-commercial purposes if attributed to John and Miriam Carver.John Carver' Phone 404-728-9444, [email protected], www.carvergovernance.com

Miriam Carver' Phone 404-728-0091, [email protected], www.carvergovernance.com

THIS INSTRUCTIONAL TOOL IS FOR USE WITH TRAINED GUIDANCE WITHIN TIIE POLICY GOVERNANCE® MODEL.4


POLICY TITLE: AGENDA PLANNING

To accomplish its job products with a governance style consistent with board policies, the board will follow anannual agenda which (a) completes are-exploration of Ends policies annually and (b) continually improves boardperformance through board education and enriched input and deliberation.

1. The cycle will conclude each year on so that administrative planning and budgeting can be basedon accomplishing a one year segment of the board's most recent statement oflong term Ends.

2. The cycle will start with the board's development of its agenda for the next year.

A. Consultations with selected groups in the ownership, or other methods of gaining ownershipinput will be determined and arranged in the first quarter, to be held during the balance of theyear.

B. Governance education, and education related to Ends determination, (e.g. presentations byfuturists, demographers, advocacy groups, staff, etc.) will be arranged in the first quarter, to beheld during the balance of the year.

3. Throughout the year, the board will attend to consent agenda (newer term is "Required ApprovalsAgenda") items as expeditiously as possible.

4. At any meeting prior to which monitoring reports have been received, the board will ascertain by votewhether a majority of members judge the individual reports to have demonstrated fulfillment of areasonable interpretation of the applicable policy.

5. CEO remuneration will be decided after a review of monitoring reports received in the last year during themonth of .

© John and Miriam Carver. Copying permitted for non-commercial purposes if attributed to John and Miriam Carver.Jolm Carver' Phone 404-728-9444, [email protected], www.carvergovernance.com


THIS INSTRUCTIONAL TOOL IS FOR USE WITH TRAINED GUIDANCE WITHIN THE POLICY GOVERNANCE® MODEL.5


POLICY TITLE: BOARD MEMBERS' CODE OF CONDUCT

The board commits itself and its members to ethical, businesslike, and lawful conduct, including proper use ofauthority and appropriate decorum when acting as board members.

1. Board members must have loyalty to the ownership, unconflicted by loyalties to staff, otherorganizations, and any personal interest as a consumer.

2. Board members must avoid conflict of interest with respect to their fiduciary responsibility.

A. There will be no self-dealing or business by a member with the organization. Members willannually disclose their involvements with other organizations, with vendors, or anyassociations that might be or might reasonably be seen as being a conflict.

B. When the board is to decide upon an issue, about which a board member has an unavoidableconflict of interest, that member shall absent herself or himself without comment from notonly the vote, but also from the deliberation.

C. Board members will not use their board position to obtain employment in the organizationfor themselves, family members, or close associates. Should a board member apply foremployment, he or she must first resign from the board.

3. Board members may not attempt to exercise individual authority over the organization.

A. Board members' interaction with the CEO or with staff must recognize the lack of authorityvested in individuals except when explicitlyboard authorized.

B. Board members' interaction with public, press or other entities must recognize the samelimitation and the inability of any board member to speak for the board except to repeatexplicitly stated board decisions.

C. Except for participation in board deliberation about whether the CEO has achieved anyreasonable interpretation of board policy, members will not express individual judgments ofperformance of employees ofthe CEO.

4. Board members will respect the confidentiality appropriate to issues of a sensitive nature.5. Board members will be properly prepared for board deliberation.6. Board members will support the legitimacy and authority of board decisions, irrespective of

the member's personal position on the issue.7. Board members will contribute [no less than $xxxx][no fewer than 100 hours as operational

volunteers as directed by staff] each year.

© John and Miriam Carver. Copying permitted for non-commercial purposes if attributed to John and Miriam Carver.John Carver' Phone 404-728-9444, [email protected], www.carvergovernance.com


THIS JNSTRUCTIONAL TOOL IS FOR USE WITH TRAINED GUIDANCE WITHJN TIffi POLICY GOVERNANCE® MODEL.6


POLICY TITLE: COST OF GOVERNANCE

Because poor governance costs more than learning to govern well, the board will invest in its governancecapacity.

Accordingly:

1. Board skills, methods, and supports will be sufficient to assure governing with excellence.

A. Training and retraining will be used liberally to orient new members and candidates formembership, as well as to maintain and increase existing member skills andunderstandings.

B. Outside monitoring assistance will be arranged so that the board can exercise confidentcontrol over organizational performance. This includes, but is not limited to, fiscalaudit.

C. Outreach mechanisms will be used as needed to ensure the board's ability to listen toowner viewpoints and values.

2. Costs will be prudently incurred, though not at the expense of endangering the developmentand maintenance of superior capability.

A. Up to $ in fiscal year for training, including attendance atconferences and workshops.

B. Up to $ in fiscal year for audit and other third-partymonitoring of organizational performance.

c. Up to $ in fiscal year for surveys, focus groups, opinionanalyses, and meeting costs.

© Jolm and Miriam Carver. Copying permitted for non-commercial purposes if attributed to Jolm and Miriam Carver.John Carver' Phone 404-728-9444, [email protected], www.carvergovernance.com


TIllS INSTRUCTIONAL TOOL IS FOR USE WITH TRAINED GUIDANCE WITHIN THE POLICY GOVERNANCE@ MODEL.7

POLICY TYPE: BOARD-MANAGEMENT DELEGATION

POLICY TITLE: ACCOUNTABILITY OF ntu CEO

The CEO is the board's only link:to operational achievement and conduct, so that all authority andaccountability of staff, as far as the board is concerned, is considered the authority and accountability of theCEO.

Accordingly:

1. The board will never give instructions to persons who report directly or indirectly to the CEO.

2. The board will not evaluate, either formally or informally, any staff other than the CEO.

3. The board will view CEO performance as identical to organizational performance, so thatorganizational accomplishment of board stated Ends and avoidance of board proscribed meanswill be viewed as successful CEO performance.

© John and Miriam Carver. Copying permitted for non-commercial purposes if attributed to John and Miriam Carver.John Carver- Phone 404-728-9444, [email protected], www.carvergovernance.com

Miriam Carver> Phone 404-728-0091, [email protected], www.carvergovemance.com

THIS INSTRUCTIONAL TOOL IS FOR USE WIlli TRAINED GUIDANCE wrrnIN THE POLICY GOVERNANCE® MODEL.8


POLICY TITLE: DELEGATION TO THE CEO

The board will instruct the CEO through written policies which prescribe the organizational Ends to be achieved,and describe organizational situations and actions to be avoided, allowing the CEO to use any reasonableinterpretation of these policies.

Accordingly:

1. The board will develop policies instructing the CEO to achieve specified results, for specifiedrecipients at a specified relationship between cost and results. These policies will be developedsystematically from the broadest, most general level to more defined levels, and will be called Endspolicies. All issues that are not Ends issues as defined above are Means issues.

2. The board will develop policies that limit the latitude the CEO may exercise in choosing theorganizational means. These limiting policies will describe those practices, activities, decisions andcircumstances that would be unacceptable to the board, even if they were to be effective. Thesepolicies will be developed systematically from the broadest, most general level to more definedlevels; they will be called Executive Limitations policies. The board will never prescribeorganizational means of the CEO.a. Below the global level, a single limitation at any given level does not limit the scope of any

foregoing level.b. Below the global level, the aggregate of limitations on a given level may embrace the scope of

the foregoing level, but only ifjustified by the CEO to the board's satisfaction.

3. As long as the CEO uses any reasonable interpretation of the board's Ends and ExecutiveLimitations policies, the CEO is authorized to establish all further policies, make all decisions, takeall actions, establish all practices and develop all activities. Such decisions of the CEO shall have fullforce and authority as if decided by the board.

4. The board may change its Ends and Executive Limitations policies, thereby shifting the boundarybetween board and CEO domains. By doing so, the board changes the latitude of choice given to theCEO. But as long as any particular delegation is in place, the board will respect and support theCEO's choices.

© Jolm and Miriam Carver. Copying permitted for non-commercial purposes if attributed to John and Miriam Carver.John Carver- Phone 404-728-9444, [email protected], www.carvergovernance.com

Miriam Carver- Phone 404-728-0091, [email protected], www.carvergovernance.com

THIS INSTRUCTIONAL TOOL IS FOR USE wrrn TRAINED GUIDANCE WTI1IIN THE POLICY GOVERNANCE® MODEL.9


POLICY TITLE: MONITORING CEO PERFORMANCE

Systematic and rigorous monitoring of CEO performance will be solely against the board's required CEO joboutputs: organizational accomplishment of any reasonable interpretation of board policies on Ends andorganizational operation within the boundaries established in board policies on Executive Limitations,reasonably interpreted.

Accordingly:

1. Monitoring is simply to determine whether or not expectations expressed in board policies have beenmet. Information that does not disclose this will not be considered to be monitoring information.

2. The board will obtain disclosure about the CEO's interpretations of the board policy beingmonitored from the CEO himself or herself

3. The board will obtain data disclosing whether or not the CEO's interpretations have beenaccomplished using one or more of three methods: (a) by internal report, in which the CEO disclosesthe data to the board; (b) by external report, in which an external, disinterested third party selectedby the board collects the data; and (c) by direct inspection, in which data are collected by the board,a designated board member or by designated board members.

4. In every case, the board will determine: (a) the reasonableness of the CEO's interpretations, using a«reasonable person test" rather than with interpretations favored by board members or the board as awhole. The board is the final arbiter of reasonableness. The board will also assess: (b) whether datademonstrate the accomplishment of the interpretation.

5. All policies that instruct the CEO will be monitored at a frequency and by a method chosen by theboard. The board can monitor any policy at any time by any method, but will normally use a routineschedule.

Policy MethodActual Financial Condition Internal

ExternalInternalInternal

FrequencyQuarterlyAnnuallyAnnuallyAnnually

Month1,4,7,10

3106

Financial PlanningTreatment of StaffOtherELs ...Ends 1Ends 2

InternalInternal

AnnuallyAnnually

37

© John and Miriam Carver. Copying permitted for non-commercial purposes if attributed to John and Miriam Carver.John Carver- Phone 404-728-9444, [email protected], www.carvergovemance.com

Miriam Carver> Phone 404-728-0091, [email protected], www.carvergovernance.com

Board meeting review Date _ Name _

Governing StyleThe board will govern lawfully, observing good governance principles, with an emphasis on:

(write evaluative comments under each section and mark the appropriate box on right)

(a) outward vision rather than an internal preoccupation, Mostly Yes

Mostly No

(b) encouragement of diversity in viewpoints, Mostly Yes

Mostly No

(c) broad strategic leadership more than administrative detail, Mostly Yes

Mostly No

(d) clear distinction of Board and chief executive roles, Mostly Yes

Mostly No

(e) collective rather than individual declstcns, Mostly Yes

Mostly No

(f) future rather than past or present, Mostly Yes

Mostly No

(g) pro-activity rather than reactlvlty. Mostly Yes

Mostly No.

Any other comments

Too18.8 Annual Planning for a Policy Governance BoardCreate a calendar for the full year, with months on one side and categories of board activity across the top.Reference relevant board policies and bylaws.

Ownership Policy Policy Othera

Connection Decisions- Decisions-Organization Board

January Annual meeting Annual review ofGovernanceProcess policies

February Reconsideration of Annual boardTreatment of Staff budget approvedpolicy

March Focus groups for Reconsiderationkey influencers of board

members' code ofconduct

April Publication of Annual review of Board successionowners' guide Ends policies planning

and so on ...

"See the text that follows for other possible headings.

For each month, consider what, if anything, the board will do under the following headings, each of whichcomes directly from the board's job description.

Ownership Connection

Enter key activities from the board's ownership linkage plan (see Chapter Three). Don't forget to includeplanning for the annual meeting, the annual report, receipt of the auditor's report, and changes to bylaws.

Policy Decisions-Governing the OrganizationEnter any decisions that the board needs to make about Ends or Executive Limitations policies, including anyannual policy reviews that are due.

Policy Decisions-Governing the Board

Enter any decisions that the board needs to make about Governance Process or Board-Management Delegationpolicies, including any annual policy reviews that are due.

Enter any decisions or actions that are needed in regard to board succession planning, annual board planning,annual budgeting for board work, annual disclosure of interests per the board's conflict of interest policy, auditactivities, or board officer elections.

Enter any decisions or actions that are needed on matters of CEO employment, compensation, or successionplanning.

Monitoring and Evaluation-Organization

Enter the dates that monitoring reports are due from the CEO on Ends and Executive Limitations policies. Enterthe date of the CEO's annual evaluation.

Monitoring and Evaluation-BoardEnter the dates that monitoring reports are due from the CGO or the board on Governance Process and Board-Management Delegation Policies. Enter the date of the annual board evaluation.

Getting Started with Policy Governance: Bringing Purpose, Integrity, and Efficiency to Your Board. Copyright © 2009 John Wiley &Sons, Inc. All rights reserved.

Board Education

Enter key activities from your plan for board education-for example, to inform the following activities:

• Ownership linkage• Policy development• Monitoring and evaluation• New board member orientation• Any other products for which the board has taken responsibility

Getting Started with Policy Governance: Bringing Purpose, Integrity, and Efficiency to Your Board. Copyright © 2009 John Wiley &Sons, Inc. All rights reserved.

Board Monitoring and Evaluation: The Basicswith PhilGraybeal … · 2014. 5. 21. · 1....

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