This is addressed to the 3.3 million of you who have asked search engines, “What is governance?’” Here’s the best answer I can give you.
Imagine that you are a young child again. School is out for the day. You’ve been home, but now you are outside playing with your friends. You are well aware of your limits and you respect them. They define your freedom. In my case I knew that I was free to play anywhere in the small town we lived in. I also knew that I couldn’t go past the cemetery to the south, across the tracks to the west, beyond Swan Creek in the north and Bell Road to the east. I also knew that I couldn’t stay out after dark, and I couldn’t miss supper.
Ironically, it was those limitations that gave me freedom. It is this simple principle that makes governing more like parenting than managing.
A governing board gives its CEO freedom to pursue the strategic direction that it has defined in the strategic plan. Instead of micro-managing by asking the CEO to come back for specific permission on a host of management decisions, the board simply states the limits of the CEO’s authority. Within his or her circle of authority, defined by those limits, the CEO is free to be excellent and creative in reaching for the strategic goals.
This governance principle has its root in the Old and New Testament. The basic “job description” of every human being has two components: Love God and Love your neighbour. God gives us far more freedom in fulfilling those two responsibilities than we give God credit for giving us. Instead of requiring us to come back again and again for permission for all of life’s decisions, God gives ten straightforward limitations: the Ten Commandments. They are stated in the negative and they define our freedom.
The first three Commandments relate to our responsibility to love God. The other seven refer to the limitations placed upon us in loving our neighbour as long as we stay within the limitations expressed in the Ten Commandments, we are free to pursue our love for God and our love for our neighbour as we wish.
Governing boards will achieve far more if they follow God’s example of delegating authority with limitations that produces freedom to fulfill responsibilities.
It is frequently the case, however, that board members bring their management experience into the board room instead of their experience of parenting or memories of being parented. That is why boards fall naturally into the bad habit of making management decisions instead of setting governing policies that define the strategic objectives and the limitations of the authority they delegate to their CEO.
Many boards begin life as advisory boards. They act as “cheerleaders” and in some cases don’t even make management decisions. This is particularly true when a founder recruits his or her personal friends as a founding board. In these cases, the boards may “rubber stamp” decisions that the founder has already made. After all, the founder knows more about it anyway.
As boards mature and the organization grows, the board may take on more management responsibility. There comes a point in this stage of an organization’s growth and development where growth cannot progress further. The board simply can’t handle the volume of information or decisions required, given the time they have as volunteers. It is at this point that a board is well advised to make the transition to becoming a governing board.
The board does this by creating policies to define the desired strategic results and by delegating the authority and the responsibility to the CEO to achieve them within the limitations of authority and available resources.
The Relationship ModelTM was developed to apply God’s design of relationships to the governance of faith-based non-profit organizations.
Les Stahlke, President/CEO
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