The most effective boards prioritize keeping policies written, current, and fully understood by each board member. So why don’t most boards do this?
We acknowledge: it is a lot of work. But consider this…
Say you have a very specific need to bring a highly-talented person from another country into your company but wonder what would be involved to help them legally relocate and whether it’s even possible. The best lawyer knows the answer because she works in the area all the time. She doesn’t have to take a few days to research it and then maybe call a couple of other experts to double-check. She can tell you the answer immediately.
Or maybe you are planning to offer a stock grant to your top candidate for the CEO role but you want to make sure you don’t make any promises that can’t be kept. You call the expert accountant who can walk you through the exact steps and language that will ensure compliance with related laws.
Professionals already know. Novices go and look things up.
This is just one way that high-performing boards stand apart from the rest. They know their job. They understand their context. They are ready to make well-informed decisions faster. When speed is often the difference between winning and losing in our competitive marketplace, this is an advantage you cannot afford to ignore.
This is where governing policies become sink-or-swim. Yes, keeping written governing policies up-to-date and ensuring they are thoroughly understood by the whole board is a lot of work… but it is the difference between being novices and being a great board.
Benefits of Staying On Top of Governing Policies
You’re busy, and we can’t manufacture more hours in your day. We can, however, empower you to operate as efficiently as possible, making the most of what you do have. Understanding and updating relevant governing policies does this. In spades. Doing so facilitates:
- Shared Clarity. Documenting what is expected and discussing what that actually means is crucial for creating shared clarity for board members. Many are fond of saying, “If it’s not documented, it didn’t happen.” True. Also, if it’s not documented, what happens next time?
- Consistency. When you do the work, your decisions, across many years, always align and clearly demonstrate that there is one answer to the same question. Times change, you’ll run into unique circumstances, sure—but you will also have a solid framework on which to base decisions.
- Fairness. Policies ensure that every stakeholder is treated the same way. Equity is essential in any organization.
- Time Savings. When a board encounters problematic or challenging situations, this pre-work means that they don’t trigger hours of deliberation or multiple meetings. The scenario has already been thoroughly examined and thoughtfully addressed by concisely written policy. Similar situations can be handled quickly—and perhaps even without board involvement because their direction clearly empowers staff to act.
- Staff Empowerment. This is a large part of the point, right? The board’s guidance makes it easier for staff energy to be applied optimally—with clarity and efficiency.
- Speedy Responses. Like the expert lawyer or accountant in our previous examples, when board members are well aware of their own governing policies, they can act with confidence when faced with challenging situations.
- Legal Defence. When your board has clear, written policies that are actively followed and monitored, you can demonstrate that you have done your due diligence should decisions or actions be called into question.
- New Board Member Orientation. When a new member comes to the table, policies clarify expectations and give them a tangible resource to which they can refer. It makes it easier for them to work well with the whole board. It is important to onboard new members well.
- Unity. When you all understand the governing policies, your board can speak with one voice and act with cohesion.
BONUS: Never Allow Exceptions to Policy!
It’s all too easy to fall into the “just this once!” trap, or getting talked into making an exception because there are “special” circumstances or “unique” factors at play. Don’t.
As soon as you make an exception—just this once—it tells stakeholders that, if they make a convincing argument, they can supersede policy. It tells them that you don’t really back policy.
Worse, these reversals typically happen after a stakeholder attempted to get what they wanted, were told “No” by the staff, and then appealed to the board. A policy exception is essentially an overruling of the staff. Talk about demoralizing!
Easiest advice ever, especially when dealing with ambiguity. Don’t let it happen!
If you think that a policy does not adequately address a special situation, revise the policy. You are not overruling (and by proxy, giving a no-confidence vote to) the staff—you are revisiting policy. Further, you equip staff with the right direction to implement without your involvement in the future. This is empowering.
Most of the time, when boards realize that they should, in fact, change the policy instead of making an exception, they reaffirm that the original policy was the best direction for the future. They recognize that they allowed personal relationships, emotional pleas, or convincing arguments to sway—and even manipulate—their decision. This violates virtually all of the benefits of updated, well-understood board policies.
This is not to say that when something is codified as policy, it is infallible or impervious to change and evolution. Quite the opposite. This is why continuing work relating to updating and understanding governing policies is so crucial. Yes, it is work. But that’s what we’re here for.
Take Full Advantage of Effective Board Policies
While it does take work, there are ways to work smarter when it comes to creating and maintaining governing policies. Here’s how:
Rigorously ensure board policies are only governing policies. Remember: Noses in, fingers out. Leave the specifics regarding operating procedures to the management team. Another way to say it, Stay in your lane!
Regularly review all board policies. Make sure they are up-to-date and understood by all board members. An effective approach is to split this out over four meetings across the year so the task doesn’t feel onerous or all-consuming. Every board member reviews all the policies for a particular section before the meeting, and each person is assigned a specific segment. They must be ready to lead the board discussion on this, highlighting points of importance, as well as areas to be considered for revision/updating.
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