GEM Governance SummitAn Introduction to

Governance Models and Practices

A Board ≠ A Board

Great Variation In GEM Member Pool Boards

Size

How Directors become Directors

Structure

Function

7 - 122 Directors

Appointed

Elected

0 - 8 Committees

Manage & Policy

Policy Only

Is there a ‘right’ and a wrong way of governing? There is no single ‘right’ way – but there are

many wrong ways Each organization is different – but they have

in common: The basic responsibilities of Boards Some best practices of governance

Today we’ll touch on: Organizational roles Basic Board responsibilities Different models of governance Best practices for governance

4 Organizational Roles Ownership: Having the legal or moral right to an

organization. The source of the board’s authority to govern.

Governance: Determining and making the policy for the affairs of an organization

Management: Controlling and directing of the affairs of an organization.

Operations: Carrying out the functional activities of an organization.

Relationship of Organizational Roles

Ownership

Governance

Management

Operations

Management is the link between

Governance & Operations

Governance is the link between

Ownership & Management

3 Board Roles Leadership & decision making Assure accountability Representation

Role: Decision making & leadership Set organizational direction

Mission Values and culture Vision and strategy for the future

Stewardship of Resources Financial Risk management Human Resources

Role: Accountability- Here is where the buck stops

Monitor Effectiveness Board Performance CEO Performance Organizational Performance

Communication Transparency of process & decisions to “owners”

Role: Representation Represents the ‘owners’

Act in interest of the organization – not self-interest

Sustain the Board Board orientation Board and leadership succession

Models of Representation

Partnership

• Board acts as a team

• Directors seen as bringing skills to the organization

• May be appointed or be elected by ‘general’ membership

• Decisions usually by consensus (even if there are formal votes)

Stakeholder

• Stakeholder groups elect representatives

• Directors represent a constituency

• Board may mediate between interests

• Decisions usually by consensus (even if there are formal votes)

Partnership

• Each member organization has a representative

• Board often manages & organizes the organization’s activities

• Members may negotiates among each other

• Decisions typically made by voting

Models of Decision Making & Leadership: A Continuum

Carver PolicyGovernance

Results OrientatedBoard

Traditional PolicyBoard

involvement in Day to Day OperationsLEAST MOSTManagementBoard

OperationalBoard

Governance & Management RolesCarver Policy

Governance

Results – Oriented

Board

Traditional Policy Board

Management Board

Operational Board

Governance Board Board Board

Executive Committee

Board Board

Management CEO CEO CEO Executive Committee

Board

Board & Staff RelationshipCarver Policy

Governance

Results Oriented

Board

Traditional Policy Board

Management Board

Operational Board

Directive Policy Ends & Limitations to

CEO

Policy Approval by

Board

Policy Approval by Board

Policy Approval by Board

Operations to Staff

Policy Approval by Board

Delegative Management to CEO

Management to CEO

Governance to Executive Committee

Management to CEO

Management to Executive Committee

Management & Operations

Committees & Task Groups

Collaborative Board & CEO roles distinct

Policy Development led by CEO

Policy Influenced by CEO

Management influenced by

Board

Board Member & Staff

Influence Management &

Operations

Board Members & Volunteers Governance Management Operations

Board Best Practices Have clarity

Roles for Board, Committees and CEO The delegation of authority and accountability Collaborative and decision making process

Have as few standing committees as possible Use committees to

‘grow’ Board members Increase agility of decision making Special tasks

Board Best Practices Govern as a group with one voice

Once a decision is made support it Individual directors have no authority unless

clearly delegated by the Board Act on behalf of the organization as a whole

And if not make self-interest clear

Board Best Practices Set criteria for success Systematically monitor/evaluate:

Whether criteria for success are being met Whether programs and services are serving the

mission or purpose of the organization

Board Best Practices Pay attention to the organizational culture

Values Code of ethics Behavioral expectations

Organizational Structure

There is no such thing as the one right organization. There are only organizations, each of which has distinct strengths, distinct limitations and specific applications. It is a tool for making people productive in working together. As such, a given organizational structure fits certain tasks in certain conditions and at certain times.

Peter F. Drucker