history of governance

[Gary_Davis]

There's an excellent article in the Jan-Feb 2009 issue of BoardSource's "Board Member" on history of recent trends in governance. It's by Marla Bobwick and is on pages 9-11.

- Gary Davis, CAE, Ph.D.

[Elizabeth_Gray]

Appears to require $100/yr membership to access this content. Any chance it can be shared via this forum, if attribution is included?

Thanks,
Elizabeth

Elizabeth Gray
Business Systems Analyst Supervisor
Austin Fire Department

[Gary_Davis]

Because you've asked for a summary of the article, here it is.

First of all, kudos to Marla J. Bobowick, Senior Governance Consultant at BoardSource who wrote the article.

Bobowick says that governance is "to steer, to control and to influence from a position of authority."

Stage One. 1988 through 1991 was the era of "defining boundaries." How does the board's job differ from those of the chief of staff? Three books that dominated this era were John Carver's Boards That Make a Difference, Tom Ingram's Ten Basic Responsibilities of Nonproft Boards, and Cyril Houle's Governng Boards: Their Nature and Nurture. The idea here was that, in Houle's words, "a good board is a victory, not a gift." In other words, it takes hard work to develop a board that knows what's is supposed to be doing.

Stage Two. 1992-1997 was the "Age of Excess." Remember the United Way scandals? Big shots were found out and fired. Congress passed the "Tax Payer Bill of Rights" and the IRS set penalties for nonprofits that overcompensated their CEOs.

Stage Three. 1996-2001 was "the Performance Period." Chris Letts, Bill Ryan and Allen Grossman published High Performance Nonprofit Organziations. Paul Light wrote Sustaiing Innovation. Greg Dees wrote "Enterprising Nonprofits." Richard Chait, Barbara Taylor and Tom Holland introduced "The New Work of the Nonprofit Board," which argued that the board should focus on critical issues, measure success and be actively engaged. New board structures began to appear.

Stage Four. 2001-2008 was "the Era of Accountabiilty and Leadership." The Sarbannes-Oxley Act oof 2002 raised the bar for corporate board leadership and indirectly affected expectations of nonprofit boards. The Red Cross, American University and The Nature Conservancy all suffered from failed governance. In 2004, Sen. Charles Grassley's Senate Finance Committee held hearings on "Charity Oversight and Reform." The next year teh Panel on th Nonprofit Sector published "Strengthening Transparency, governance, Accounability of Charitiable Organizations."

Richard Chait published his seminal "Governance as Leadership," which challenged boards to move beyond their fiduciary responsibility and their strategic planning to a new, "generative" level of work that involved changing the organization and the world.The IRS rolled out its "Exempt Oerganizations Executive Compensation Compliance Project." The Panel on the Nonprofit Sector in 2007 published "33 Principles of Good Governance and Ethical Practice: A Guide for Charities and Foundaitons." The document addressed legal copliance and disclosure, effective governance, strong financial overight and responsible fundraising.

Jim Collins' books, especially Good to Great, demonstrated that organizations excel only when they are well led.

[Gary_Davis]

Sorry for all the typos in the previous post. I've cleaned it up and here's an offering that's more respectable:


Kudos to Marla Bobowick of BoardSource who wrote the original article. It appears in the February issue of Board Member magazine.


Bobowick says that governance is "to steer, to control and to influence from a position of authority."

Stage One. 1988 through 1991 was the era of "defining boundaries." How does the board's job differ from those of the chief of staff? Three books that dominated this era were John Carver's Boards That Make a Difference, Tom Ingram's Ten Basic Responsibilities of Nonprofit Boards, and Cyril Houle's Governing Boards: Their Nature and Nurture. The idea here was that, in Houle's words, "a good board is a victory, not a gift." In other words, it takes hard work to develop a board that knows what's is supposed to be doing.

Stage Two. 1992-1997 was the "Age of Excess." Remember the United Way scandals? Big shots were found out and fired. Congress passed the "Tax Payer Bill of Rights" and the IRS set penalties for nonprofits that overcompensated their CEOs.

Stage Three. 1996-2001 was "the Performance Period." Chris Letts, Bill Ryan and Allen Grossman published High Performance Nonprofit Organizations. Paul Light wrote Sustaining Innovation. Greg Dees wrote "Enterprising Nonprofits." Richard Chait, Barbara Taylor and Tom Holland introduced "The New Work of the Nonprofit Board," which argued that the board should focus on critical issues, measure success and be actively engaged. New board structures began to appear.

Stage Four. 2001-2008 was "the Era of Accountability and Leadership." The Sarbannes-Oxley Act of 2002 raised the bar for corporate board leadership and indirectly affected expectations of nonprofit boards. The Red Cross, American University and The Nature Conservancy all suffered from failed governance. In 2004, Sen. Charles Grassley's Senate Finance Committee held hearings on "Charity Oversight and Reform." The next year the Panel on the Nonprofit Sector published "Strengthening Transparency, governance, Accountability of Charitable Organizations."

Richard Chait published his seminal "Governance as Leadership," which challenged boards to move beyond their fiduciary responsibility and their strategic planning to a new, "generative" level of work that involved changing the organization and the world. The IRS rolled out its "Exempt Organizations Executive Compensation Compliance Project." The Panel on the Nonprofit Sector in 2007 published "33 Principles of Good Governance and Ethical Practice: A Guide for Charities and Foundations." The document addressed legal compliance and disclosure, effective governance, strong financial oversight and responsible fundraising.

Jim Collins' books, especially Good to Great, demonstrated that organizations excel only when they are well led.

[Elizabeth_Gray]

Thank you very much for providing a summary for content that would not otherwise be readily available.

Let me dare to take the thread in a slightly different direction now: I've had the coincidence--I guess-- to be involved with two boards that were/are heavily invested in the so-called Carver Model of governance: boards set end and executive limitations, staff determine the means within those parameters.

It has never appeared to work very well, and I wonder if anyone else has much experience with this particular "algorithm" for governance.

[Mike_Kiska]

"and I wonder if anyone else has much experience with... the so-called
Carver Model of governance"

Yes, our Board of Trustees received training by Bill Charney 2 or 3
years ago and currently uses this model. I facilitated some Board
retreats while they struggled with this during the changeover. It is a
tricky concept to master and I've found that the Executive Director
needs to be very well versed in its methods so he/she can spend a lot of
time helping the board along.

Mike Kiska
Training & O.D. Manager - Administrative Services
Jefferson County Public Library
Find us on the Web: http://jefferson.lib.co.us ('http://jefferson.lib.co.us')

[Gary_Davis]

Policy Governance works when board members are committed to its principles. It's hard work putting in writing the things the board deems to be within its direct province.

The problem is that most board members simply can't resist meddling in the means when the stakes get high. Moreover, it's more than most board members can bear to concede at the get-go that the hired CEO has complete control over operations. Something in the back of their heads tells board members that "there may come a time when we will have to jump into operations to clean up a mess created by hired staff, so why in the world would we want to resolve to never do that?"

Of course, John and Miriam Carver would answer that if the board is that unhappy about how the CEO is running the organization, the board can always fire the CEO. But for most board members, the prospect of firing a CEO is more scary than the prospect of ceding operations to the staff. So most board members decide to keep their options open. That means not committing themselves to the principles of Policy Governance. And that lack of commitment spells the doom of the Policy Governance model for that particular board.

All that being said, I still think the Carvers have the only rationally defensible model for the board and its role. It's too bad that most boards lack the courage to live by its precepts.

Gary Davis at www.boardsolutions.info

[Simon_Wilson]

It's an interesting discussion. From a UK perspective I had never heard of Carver or the description 'policy governance' until recently but it echoes some of the big issues I have faced in governance of thirds sector of not for profit organisations over the past few years.

I have a couple of observations on this.

First, the only person who can enforce the 'hands off' instruction with the Board is the Chair of the Board. In my opinion, this is the critcial role and the Chair has to be empowered by the Board and then stick to it. As a Chair I have always seen one of my main functions being to shield the CEO from interference by other Board members. In turn this implies that the Chair can be very facilitative in strategy discussions but quite fierce about policing the borders between the governing body and the executive. This is quite a challenge.

Second, I have a sense that different cultures have different problems with this. It is my impression that in the US there is a much stronger culture of civic engagement which is also linked to a strong commitment to direct democratic means. This in turn means that US boards seem to me to be easily tempted to roll up their sleeves and get things done. They act more like volunteers faced with a task to get done. In the UK there is perhaps more of a sense of civic responsibility being undertaken at arms length, less democratic, more paternalistic and this means that people may be more willing to step back. In some other cultures, such as France, there is a stronger commitment to rules and laws, so the emphasis is on defining systems - the cooperative, the mutual, the association - and human beings are expected to fit in. No single culture has the answer, but perhaps through exchange we can help each other work things out. From my point of view, I find the US perspective reconnects me to an idea of volunteer action which has become a bit bureaucratised in the UK.

Best wishes

Simon