Policy Governance, Part 1
By Julie Adamen

The biggest problem facing our industry is the nature of the beast itself: The structure of community associations and their elected Boards. More often than not, people with little experience in business (or on this planet) are elected to the Board because no one else wanted the job – or they had an agenda to accomplish. They understand little about governing and less about leadership. This fundamental truth makes managing communities akin to building a house on a sinkhole. You can really try to make that house, but that hole just keeps re-opening and swallows the framing.

Boards of Directors lack a specific effective guideline for operation among themselves, as a Board. They mistake meeting attendance and making motions for true community leadership. Spending far too much time trying to manage, micro-manage, mentor, act as committee members, and getting involved in minutiae where they have no business. That’s bad enough (as you all know), but probably the most destructive thing is this: They set broad policies without seeing that they are carried out in a specific manner, with specific results through specific parameters, i.e., they do so without leadership and responsibility. And the staff more often than not ends up with responsibility and no authority.

There is a better way, for all of us: It’s called Policy Governance.

Policy Governance is a method, a model for Boards of Directors put forth by a gentleman named John Carver, PhD, who provides consulting services as well as public and private classes in Policy Governance.  Dr. Carver states, on his website, that “what Boards do most of the time is a waste of time and inimical to good governance and good management… No matter how dedicated or intelligent, people cannot be all they can be in a poor system – and that is exactly what Boards (and as a result, managers) have been handicapped with.”

Policy Governance is not community association specific, but is a model for all Boards of Directors, non-profit and for profit organizations alike. From Chevron and Intel all the way to Belly Acres Estates community association, it sets forth principles that simple, but if applied to our industry would greatly enhance the clarity and focus of the jobs of the Board and the manager.

We always like to say that the Board should make policy, and let staff carry out that policy.  But the challenge here is that Boards usually have no model for conceptual development or policymaking, and the inherent and subsequent parameters for both. Mostly, they use a misguided attempt at managing, not governing. And I needn’t remind you what happens when a Board tries to manage: That’s how we got the camel, it was a horse developed by a Board (or Committee).

According to the Policy Governance model, Boards of Directors, in an effort to create, facilitate and fulfill their true role of leadership, create policies.  These polices are about 1) ends, or the finished product, specifying results, recipients and costs of the results intended, 2) policies that limit (manager) authority about methods, practices, situations and conduct, 3) policies that prescribe how the board itself will operate, and 4) policies that delineate the manner in which governance is linked to management. For our purposes, and due to space restrictions, we are going to focus on number 1:

 “The purpose of 1) the board job is) on behalf of some ownership 3) to see to it 4) that the organization 4) achieves what it should and 5) avoid what is unacceptable. “

The Board Job

The Policy Governance model tells us that the board, alone, has the ability to govern, and individual Board member do not (with the exception of any rights/privileges set forth in governing documents). What does this mean?  At no time should any one board member tell anyone what to do or when. This greatly affects the manager, often buffeted around the politics of community association boards where one vocal member from the planet Psycho is constantly calling or emailing them with instructions. Some times they can be ignored. But if you’ve had the same experiences I’ve had, as often times as not you get called on the carpet at a board meeting but that individual for not completing that task assigned by him/her. And the rest if the board just sits there, acting as if this is the way it is supposed to be: They can run amok, but you are paid to suffer in silence.  Under the Policy Governance model, this should NEVER happen, in fact “the board as a body is obligated to protect its staff from the board as individuals.”

Interestingly, Carver goes on to state that in non-profit organizations (!!) the “one voice aspect of governance” is lost by having a host of board committees (i.e., committees with members of the Board serving) running about involving themselves in issues ostensibly delegated to staff.”  The result, Carver states, is that staff ends up receiving direction from less than the board as a whole, undermining the board as a body and often “rendering the manager ineffective.”

Through Policy Governance, Carver also suggests that the board has specific job, a specific set of “values added” that justify its position. This differs from the largely reactive board, “always looking over the shoulders of others.” Indeed, he suggests that once this model of governing is adopted, the board has little to do: That the responsibility is to set policies, parameters, acceptable methods of achievement and satisfactory conclusion. The result is that everyone involved in the board process has direct guidelines under which to develop and complete tasks. The board ONLY sets policy, and staff carries out that policy as set forth by the board. Period.

Well, this is all well and good, you say, but who is going to enlighten our boards about Policy Governance? One word: YOU.  You, managers, have the audience. You are the ones out there, with direct access to Boards. You, management company owners, have a direct responsibility to your managers and the industry to spread this word. And you, on site managers, are the perfect candidates because you have the perfect medium for educating your board and adopting Policy Governance.

As an industry, we talk a lot about ways to make ourselves “more professional” including dressing up in suits and going for “higher education.” I applaud the educational aspect, but we are kidding ourselves if we think having little initials behind our names mean anything to anyone (namely, Boards) but ourselves (yes, there are pockets of exceptions, but remember, I am writing for the whole of the industry). The problem isn’t OUR lack of education and knowledge; it’s the lack of the education, knowledge and resultant sophistication of the Boards of Directors. If they had inkling on why they are there, and how to operate, their demand for excellence from their staff would ratchet up noticeably. Demand on their part would mean we, as an industry, would rise to the occasion. The first step may well be Policy Governance.

Check out this website: www.carvergovernance.com for more information.