1. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 1 Creating Accountability in Governance Presented by Susan S. Stratton, CAE Leading Edge Mentoring Grand Ledge, Michigan

2. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 2 Governance Defined Seeing to it that the organization achieves what it should and avoids unacceptable situations.

3. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 3 Critical Perspective of Policy Governance We serve the source of our communication. –Governance is a “downward” extension of the ownership, –not an “upward” extension of management.

4. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 4 How Can Accountability Be Created? Board accountability is NOT the same as staff accountability. The Board’s job product is different than the operational job product. What values-added role can the Board take that does not undermine accountability for the operational side of the organization?

5. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 5 Board’s Role in Creating Accountability Expected outcomes clearly defined Clear roles & boundaries defined Clear governance process defined Demonstrate integrity to your own policies

6. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 6 Board Integrity Undisciplined board: –undermines management accountability –violates boundaries it promised to keep –creates instability in the system Based in loss of trust, fear of surprises, unfair employment situation Honest and rigorous self-assessment upholds Board integrity

7. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 7 Board’s Role in Creating Accountability in Operations Requires systematic monitoring of achievement of previously defined outcomes, AND Data-based proof that we are achieving our outcomes and have avoided unacceptable situations. –Audit function for compliance with unacceptabilities Board’s integrity to its words.

8. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 8 Healthy Structure Board’s relationship with the CEO is formed around accountability of the position, not individual tasks. Board’s concern is for total organizational performance for which it holds the CEO accountable. CEO is accountable to the full Board, not individuals on the Board.

9. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 9 Policy Governance® More than a structure... –Policy Governance ® is a precise model of structure philosophy and process. Only coherent, comprehensive model of governance known in the world today.

10. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 10 Policy Governance’s Philosophical Foundations Accountability Servant-leadership Clarity of group values Empowerment

11. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 11 Process Required Policy Drives Everything! In accordance with this discipline, the board will only allow itself to address a topic after it has answered these questions: –Whose issue is this? Is it the Board’s or the Executive Director’s? –Has the board dealt with this subject in a policy? If so, what has the board already said on this subject and how is this issue related? If the board has already addressed the matter, does the board wish to change what it has already said? –If the matter is several levels below board level, what is the broadest way to address this issue so that it is still under existing board policy? Does that policy suffice to deal with our concern? It is out of order for board members to talk about content until these questions of appropriateness are settled.

12. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 12 The Structure of the Policy Governance Model Ends Executive Limitations Governance Process Board- CEO Linkage

13. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 13 The “Size” of A Policy Alignment of policy comes from alignment of policy by “size” or breadth –Global policies –Level 2 policies further define a concept in the global policy –Level 3 policies further define a concept in the Level 2 policies.

14. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 14 Operational Policy is Proscriptive Defines minimum level of what is NOT acceptable Opens possibility for creative solutions Empowers staff to use and leverage operational expertise. Executive Limitations are written in proscriptions-- what NOT to do.

15. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 15 Executive Limitations Begins with the Board’s Worry List Treatment of customers/members Financial budgeting Financial activities & condition Asset protection Ends focus of contracts or grants Treatment of staff Compensation and benefits for the staff Communication & support to the Board Emergency CEO Succession

16. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 16 Board-CEO Linkage The CEO is the only employee of the Board –The Board determines expectations for the organization’s production and character. –The staff is the CEO’s employees who pursue the attainments of those expectations. –The CEO leads the staff. The CEO is accountable to the Board for the success of the entire organization

17. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 17 Board-CEO Linkage Describes the Board’s relationship to the CEO Board means policy that includes: –Global linkage statement –Unity of Control –Accountability of the CEO –Delegation to the CEO –Monitoring CEO performance The only way the CEO is evaluated

18. presented by Susan Stratton, Leading Edge Mentoring, Grand Ledge, MI (517) 627-1856 18 Governance Process Board means policy –How will we govern? –How will we discuss issues? –What do we believe in or dream? –How will we connect with our ownership? –How will we connect with other important entities?