The DecisionMaking Model of Governance

First, it is critical to understand and ACCEPT the difference between governance and management prior to commencing board work.

This means that as a board member you are willing to

1. refrain from rubber-stamping decisions of the CEO,

2. interfering in the management of the organization,

3. telling the CEO how to do her job,

4. answering CEO correspondence, and

5. asking the CEO to keep the board informed of everything that is happening within the organization.

Just as you are willing to refrain from certain tasks, you are willing to accept relevant responsibilities. This means accepting the responsibility:

1. outlined in the official mandate;

2. to delineate the lines of business and their parameters;

3. to write, implement and monitor governance policies;

4. to achieve the outcomes desired;

5. related to fiscal oversight;

6. to develop a governance plan, and monitor and report to the owners;

7. related to risks;

8. related to representation;

9. to demonstrate that the board is accountable; and

10. to make decisions at the governance level.

 

The second component of the DecisionMaking model is the importance of CREATING the desired future.

There will be times when it may be necessary to make changes, and there may be times when it may be critical to maintain the status quo. The key is that the board is willing to engage "with" all stakeholders to create healthy organizations. The board does not focus solely on policy development and implementation. It focuses on the future and honors the history, culture and values of the stakeholders, board members and the organization. This means the board may make decisions based on the "general will" or they may make decisions based on the needs of persons who have been marginalized by the system.

As the board engages with the stakeholders, it is cognizant of the need to NEGOTIATE settlements with the moral and legal owners.

It is insufficient for board members to operate within a boardroom in isolation from the moral and the legal owner(s). As decision makers, the board members' first major challenge is to arrive at a common interpretation of the board's mandate. This will require negotiations between the board members and legal owner. When a settlement is reached, the board is ready to complete an internal and an external environmental scan in partnership with all its stakeholders. These scans assist the board to glean information about the health of the entity and the future directions desired by the owners.

At critical times, it is essential for the board to engage in the fourth component which is to EVALUATE the effectiveness of the organization in achieving the outcomes desired.

Two types of evaluations are necessary.

The first type is the evaluation of the contribution of persons who have roles which influence whether the negotiated settlements are truly honored. These include evaluation of:

• the board as a whole, because it is the board which steers the organization;

• each board member, because each person contributes to the overall ability of the board to stay on course; and

• the CEO who reports to the board, because she influences the work of the staff and the culture of the organization.

The second type of evaluation is designed to report on what was achieved in relation to what was expected. It focuses on measuring progress toward the stated outcomes. Evaluation is a normal part of the planning, implementation, and monitoring and reporting cycle, and is undertaken after consideration is given to how strengths will be supported and needs met.

Each of the four components is essential. Even though the components are described separately, they are inextricably linked. As a result, it is critical for a board to demonstrate strengths in each area.

Please also see the following links for additional details about the DecisionMaking Model of Governance.

• Premises of the DecisionMaking Model of Governance
• Elements in the DecisionMaking Model of Governance

Would you like a complimentary review of your governance policies? If so, follow this link Complimentary Governance Policy Report Card