Boards That Make A Difference Focus of Carver Model: The Carver ...

Boards That Make A Difference
Applying the John Carver Model to Board Governance
Presented by:
David Adams, Chairman
HRN Management Group
dave.adams@mcul.org
Jessica Strasser, Managing Consultant
HR Value Group
jstrasser@hrvaluegroup.com
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Focus of Carver Model:
• Nonprofit and Public Organization
Boards
• Boards can be “forward-thinking”
• Most boards are trapped in an
inadequate design of their jobs
• Board members mean well!
• A Positive Prescription for Success
• The Role of the Executive
The Carver Outline…
1. Leadership by Governing Boards: A Vision of Group
Accountability
2. Policy as a Leadership Tool: The Force of Explicit
Values
3. Designing Policies That Make a Difference: Governing
by Values
4. Focusing on Results: The Power of Purpose
5. Controlling Ethics and Prudence: What’s Not OK,
Even if it Works
6. Strong Boards Need Strong Executives
• The Problem is Process, Not People
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The Carver Outline…
Leadership By Governing Boards
7. Officers and Committees: The Chief Governance
Officer and Other Divisions of Board Labor
8. Policy Development by Levels: Adding Details
Judiciously
9. Making Meetings Meaningful: Creating the Future
More Than Reviewing the Past
10. Maintaining Board Leadership: Staying on Track and
Institutionalizing Excellence
11. Maintaining Board Leadership: Staying on Track and
Institutionalizing Excellence
• A Vision of Group Accountability
nuUnion Chair/CEO
Speak about the biggest mistakes
Boards can make
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What Can Go Wrong?
Broad Assessment
• Time spent on the trivial
• Reading reams of documents
• Long-running meetings that accomplish little
• Committees that are window dressing for what staff
want to do
• Meddling in administration
• Staff in control of board agendas
• Reactivity vs. Proactivity
• Executive committee as de facto Board
• Confusing about what is going on
• Rubber stamping or Meddling
• No incisive way to evaluate the Executive
• “Most of what the majority of boards do
either does not need to be done or is a
waste of time when done by the Board.
Conversely, most of what boards need
to do for strategic leadership is not
done.”
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What is Governance?
• “Reduced to its minimum, the purpose of
governance is to ensure, usually on behalf
of others, that an organization (credit
union) achieves what it should achieve
while avoiding those behaviors and
situations that should be avoided.”
What Should Boards Do?
1. Hire, evaluate and retain a good CEO
2. Provide strategic direction to the CEO
3. Establish, maintain and operate within
governance policies
4. Provide fiduciary stewardship for and on
behalf of the member-owners
GOVERNANCE POLICIES HELP WITH,
BUT DO NOT REPLACE THESE DUTIES
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Does Your Board Need This?
• Carver model is for the best of today’s boards, not
just for dysfunctional ones.
• Why is it particularly relevant to credit unions?
• What is unique about not-for-profit (nonprofit)
boards vs. for-profit or government boards?
• How is success defined?
• Producing What Owners Want
What Can Go Wrong?
• Short-term bias
• Reactive stance
• Reviewing, rehashing, redoing
• Leaky accountability (meddling)
• Unclear boundaries of authority
• Complete overload
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Moving Toward Solutions
Policy as a Leadership Tool:
• Framing the Governance Challenge
• Inadequate Prescriptions
◦ More involvement
◦ Less involvement
◦ Board as staff watchdog
◦ Board as cheerleader
• Proper Prescriptions
◦ Board as manager (of the CEO)
◦ Board as planner (with the CEO)
◦ Board as adviser (for the CEO)
◦ Board as fundraiser (for the CU)
◦ Board as communicator (with the CEO)
◦ Board as Trustees (for the members)
◦ Board Holism (for the CEO)
• The Force of Explicit Values
nuUnion Chair/CEO
Speak about how Policy Governance
Makes boards effective
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Policy as a Leadership Tool
• Policies as Values and Perspectives
• Four Reasons for Policy Leadership
1. Leverage and efficiency
2. Expertise
3. Fundamentals
4. Vision and inspiration
• Reinventing the Meaning of Policy
• Categories of Board Policy:
1. Ends to be achieved (Service Needs)
2. Means to be avoided (Executive Limitations)
3. Board-CEO Relationship
4. Governance Process
Designing Policies That Make a Difference:
• Governing by Values
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Designing Policies
• Get Rid of Unnecessary and Outdated Detail While
Being Comprehensive
• Make Policies Visible, Explicit, Literal, Active, Properly
Classified, Centrally Available and Brief
• Move Broad to Specific and Large to Small (Prioritize)
• Set Board Policy, not Staff Policy
• Hold CEO Accountable for Staff Policies
Focusing on Results:
• The Power of Purpose
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Focusing on Results
• Define Mission & Purpose
• Resist the Captivating Allure of
Organizational Events/Issues
• Stay Outward Focused
• Transaction With the Environment
• If not “Ends”, it is “Means”
• The Mask of Commendable Activities,
Conditions, Structure, Technology, Etc.
Compelling “Ends” Policies
• Strict Results Focus
• Succinctness
• Active Board Involvement in “Ends”
• Accountability to Owners/Members
• Properly Categorized
• Theme and Backbone of the CU
• Stark and Direct
• Global Purpose, Followed by Policies About Results, How
Members Benefit, Pricing, Etc.
• Integration With Long-Range Planning
• Evaluating Ends With Key Performance Measures
• Again, Broad-to-Specific and Large-to-Small
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Examples of Ends or Service Needs Policies
Sample “Ends” or “Service Needs” Policy
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Board Discussion
• How can we apply the concept of Service
Needs (Ends) Policies to our credit
union?
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Controlling Ethics and Prudence:
• What’s Not OK, Even if It Works
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Controlling Ethics and Prudence
Examples of Executive Limitations Policies
• Manage between Rubber-stamping and Meddling
• Avoid the Enticement of Operations
• The Board’s Interest: Effectiveness, Approvability,
Legitimate Control of Means, Focus on Prudence &
Ethics
• This Category is Executive Limitations Policies
• Board Prescription of Means is “Anti-Innovative”
and “Stultifying”
• Start Broad-to-specific and Large-to-small
• Transform Worries Into Policies
• Limitation, Not Empowerment
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Sample “Executive Limitations” Policy
Board Discussion
• How can we apply the concept of
Executive Limitation Policies to our credit
union?
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Strong Boards Need Strong Executives:
• The Board-Executive Relationship
nuUnion Chair/CEO
Speak about developing mutual
trust between the board and CEO
Strong Boards Need Strong Executives
• The Most Important Task of the Board
• Defining a CEO
• Nonprofits vest Chairman and CEO separately, unlike
for-profits
• Board Holism – Accountability
• The Board Has Only One Employee
• The CEO’s Work is Immaterial
• Board Members and CEO are Colleagues
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Monitoring CEO Performance
Keeping the Roles Separate
• Types of Information
◦ Decision Information (Helps Board make decisions)
◦ Monitoring Information (Goal attainment)
◦ Incidental Information (Less important)
• Methods of Monitoring
◦ Annual Evaluation
◦ Regular Reports
• Criteria for Monitoring
◦ Stay focused: Save board/staff time
◦ Have clear criteria
◦ Two-step: Compare results to policy.
• Executive Recommendations
• Intrusions by the Board
• Mutual Expectations
• Board-Management Delegation
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Examples of Board-CEO Relationship
Policies
Sample Board-CEO Policy:
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Board Discussion
• How can we apply the concept of
Board/CEO Relationship Policies to our
credit union?
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The Board’s Responsibility for Itself:
• Governing Oneself Precedes Governing
Others
nuUnion Chair/CEO
Speak about the meddling/rubber
stamping balance
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Board Accountability
• The Moral Ownership
• The Board’s Responsibility for Board
Performance
• Diversity and Dynamics
• Board Products: A Job Description,
Explicit Governing Policies and Assurance
of Organizational Performance
Basic Board Job Description
• Linkage to the Ownership
• Explicit Governance Policies
• Assurance of Organizational Performance
• Other Duties (Fundraising, public image,
legislative impact, etc.)
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Officers and Committees:
• The Chief Governance Officer and
Other Divisions of Board Labor
Officers and Committees
• Duties of Officers
• Minimalism
• Chief Governance Officer vs. Chief
Executive Officer
• Protection of the CEO Role
• Board Holism
• Committees: Minimalism and Pre-work vs.
Post-work
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Policy Development by Levels:
• Adding Details Judiciously
Policy Development
• The Crucial Difference Between Levels
and Lists
• Form and Function
◦ Participation & Voting
◦ Decision Information
◦ Everything in its Place
◦ Proceeding from the Top Down
◦ Meticulous Care
◦ Role of the CEO in Policy Development
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Making Meetings Meaningful:
• Creating the Future More Than
Reviewing the Past
Making Meetings Meaningful
• Managing a Talking Job
• Choosing the Issues
• Screening Form Before Content
• Being Ready for Discussion
• Rbb Rubber-stamping vs. Meddling
• Tradition & Law
• Planning the Agenda – Tie to the Long-term
• Ends Justify the Meetings
• Managing the Transition
• Unity in Board Purpose Despite Diversity
• The Character of Meetings
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Examples of Board Process Policies:
Sample Board Process Policy:
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Board Discussion
• How can we apply the concept of Board
Process Policies to our credit union?
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Maintaining Board Leadership:
• Staying on Track and Institutionalizing
Excellence
nuUnion Chair/CEO
Speak about how boards
Can make a difference
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Maintaining Board Leadership
• Be Obsessed with Effects for People
• Invigorate the Ends Debate
• Drive Ends Dialogue Beyond the Boardroom
• Don’t Be Seduced by Cost Control
• Keep Trusteeship Up Front
• Respect your Words
• Invest in Selection & Training
• Recruit Those Who Can and Will Govern
• Commit to Structured Practice
• Make Self-Evaluation a Regular Event
Parting Thoughts
• Realize that Good Begets Better and
Clarity Begets Trust
• Never Forget that Governance is a Means
• Excellence Begins in the Boardroom
• One Size Can’t Fit All
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Board Discussion
• What are the next steps for applying
Policy Governance in our credit union?
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Additional Resources
• HR Value Group Consulting
• CUcorp’s “Policy Pro” Governance
Module
• John Carver’s “Boards That Make a
Difference”
• CU commitment to Board training with
MCUL, CUNA and Others
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Boards That Make A Difference
Applying the John Carver Model to Board Governance
Presented by:
David Adams, Chairman
HRN Management Group
dave.adams@mcul.org
Jessica Strasser, Managing Consultant
HR Value Group
jstrasser@hrvaluegroup.com
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