Who is Really in Charge - Decision making from board level to volunteers


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Presented by Karen Colnlon, California Association of Community Managers
At the Association Congress 2011

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  • Describe what CACM does Global Ends: CACM exists so members enjoy an environment necessary for professional success.
  • CACM ENDS CACM HAS 5 KEY ENDS POLICIES WITH SOME SUB-CATEGORIES CEO has 9 policies with management limitations There are 5 board-management delegation policies There arte 10 governance process policices
  • Examples: The board does not approve the budget. They have a policy that defines Financial Planning and budgeting. I give them my interpretation of the policy, provide a report on how I complied with the policy and usually attach certain documents to substantiate my report. The board then determines if my interpretation is REASONABLE. Policy 3.4.3 “”In every case, the board will judge whether the President’s interpretation is reasonable and whether data demonstrates accomplishment of or compliance with the President’s interpretation.
  • This is a policy governance chart that reflects who and what is responsible for the various aspects of the PG process.
  • Who is Really in Charge - Decision making from board level to volunteers

    1. 2. Association Congress 2011 Who Is Really in Charge? Decision making from Board Level to Volunteers Karen D. Conlon California Association of Community Managers, Inc. Laguna Hills, California USA
    2. 4. California Association of Community Managers, Inc. <ul><li>Statewide professional association </li></ul><ul><li>501 (c)(6) non profit, mutual benefit corporation in California </li></ul><ul><li>Organized in 1991 with 250 members; budget of $250,000 </li></ul><ul><li>Currently 2886 members </li></ul><ul><li>2009 Annual Budget $3,303,107 </li></ul><ul><li>Eleven employees </li></ul>
    3. 5. Purpose of Formation Establishment of Professional Standards and a Unique Recognized Certification Program <ul><li>Industry Advocacy & Representation </li></ul><ul><li>Corporate Responsibility </li></ul><ul><li>Professional Ethics with Discipline process </li></ul><ul><li>Created a certification program with education & testing </li></ul><ul><li>Opportunities for industry networking </li></ul><ul><li>Synergy for the community management industry </li></ul><ul><li>Send a message to Sacramento – we will discipline our own </li></ul><ul><li>Serving the Community and Consumers </li></ul>
    4. 8. Governance System Early Years 1991 – 2003 Initially Volunteer driven <ul><li>27 Directors elected by the membership (9 were Founding Directors </li></ul><ul><li>serving an initial 4 year term) </li></ul><ul><li>Staggered terms between 1 and 3 years (for consistency and based </li></ul><ul><li>on number of votes received upon election; no term limits </li></ul><ul><li>7 member Executive Committee (officers) </li></ul><ul><li>Chief Executive (employee of CACM) </li></ul><ul><li>Staff size grew from one (1) to six (6) </li></ul><ul><li>Meetings: </li></ul><ul><li>> Board of Directors – 5 times per year </li></ul><ul><li>> Executive Committee – each month with Executive </li></ul>
    5. 9. Beginning our Teenage Years 2004 - 2006 <ul><li>Tremendous growth in membership, certification, expanded publications, moved to a larger office with a training room for classes, more education offerings, expanded all programs </li></ul><ul><li>Increased staff to nine (9) </li></ul><ul><li>Leveraged revenue streams </li></ul><ul><li>Hired 2 public relations firms </li></ul><ul><li>2004 – $2 million in revenues </li></ul><ul><li>Evolved to being staff driven (Operations) organization </li></ul><ul><li>with volunteer input and leadership </li></ul>
    6. 10. Investment in a Governance System 2006: Adopted the Policy Governance © Model by John Carver <ul><li>Unrest by some Board members created factions </li></ul><ul><li>Felt like a “rubber stamp” Board, with Executive Committee </li></ul><ul><li>more involved in the day-to day operations </li></ul><ul><li>Meetings were too long and sometimes unpleasant </li></ul><ul><li>No one (including the CEO) was having fun </li></ul><ul><li>Passion for the organization was waning </li></ul>
    7. 13. Investment in a Governance System <ul><li>Hired a consultant to meet with the Board </li></ul><ul><li>Took the Board’s temperature (via a survey) </li></ul><ul><li>Compilation of responses from Board members was startling </li></ul><ul><li>Board realized they needed to make a change </li></ul><ul><li>Agreed in concept to explore the PG model (May 2006) </li></ul><ul><li>Consultant facilitated strategic planning (September 2006) </li></ul><ul><li>Approved Bylaws revisions to reduce board size to not more than17 but not less than 12 (December 2006) </li></ul>
    8. 14. Investment in a Governance System <ul><li>January 2007, Board began operating under PG model </li></ul><ul><li>Chief Executive submitted first Monitoring Report under PG model </li></ul><ul><li>Board meetings followed PG principles </li></ul><ul><li>Board elections to elect 17 Directors and use of electronic voting </li></ul><ul><li>(December 2007) </li></ul><ul><li>They didn’t kill each other and I kept my job </li></ul>
    9. 15. Governance System <ul><li>The Role of the Board of Directors is to govern and not manage. To do so the Board must…………….. </li></ul><ul><li>Represent the Ownership </li></ul><ul><li>Lead the Association </li></ul><ul><li>Evaluate Performance </li></ul><ul><li>Use a Sound Governance System </li></ul>Key Points of the PG System
    10. 16. Governance System <ul><li>Systematic Delegation to the Chief Executive </li></ul><ul><li>Using the Ends/Means Distinction for organizational achievement </li></ul><ul><li>Expressing expectations in four categories: </li></ul><ul><li>1. Ends </li></ul><ul><li>2. Executive Limitations </li></ul><ul><li>3. Governance Process </li></ul><ul><li>4. Board-Staff linkage </li></ul><ul><li>Evaluation of Performance </li></ul><ul><li>Practice doesn’t make it perfect as the leadership, organization and </li></ul><ul><li>staff evolve </li></ul>Key Points of the PG System
    11. 17. Next Steps for an Established Organization 2009 - 2010 <ul><li>Financial growth fosters reinvestment into the infrastructure </li></ul><ul><li>$3 million in revenues (2009 and 2010) </li></ul><ul><li>New programs, re-evaluation of existing programs </li></ul><ul><li>Staff grew to 11 employees </li></ul><ul><li>Greater efficiency </li></ul><ul><li>Exploring new opportunities </li></ul><ul><li>Professional development for the staff </li></ul><ul><li>Passion for the organization </li></ul><ul><li>Keep programs growing as does Membership </li></ul>
    12. 18. WHAT IS POLICY GOVERNANCE? <ul><li>Policy governance is a basic set of concepts and principles that lay the groundwork for determining appropriate Board leadership and performance. </li></ul><ul><li>It is a form of governing that clearly defines the roles of the Board and management (staff) and how they interact. </li></ul><ul><li>Creates positive transparency between the board and membership </li></ul>
    13. 19. Policy Governance <ul><li>Set of comprehensive and integrated principles that, when consistently applied, allows governing boards to realize owner-accountable organizations </li></ul><ul><li>Recognizes fundamental reasons why boards exist </li></ul><ul><li>Recognizes the nature of board authority </li></ul><ul><li>Integrates unique principles to enable accountable board leadership </li></ul>
    14. 20. NINE BASIC PG PRINCIPLES <ul><li>1. The Trust in Trusteeship </li></ul><ul><li>The Board of a nonprofit organization represents the ownership of the organization just as a for-profit board represents its stockholders. </li></ul><ul><li>Policy governance recognizes foremost that Boards exist to represent the organization on behalf of some identifiable ownership to which they are answerable. </li></ul><ul><li>Simply put, the Board governs on behalf of persons who are not seated at the Board table. </li></ul><ul><li>The board’s role is NOT to run the organization, but to ensure the organization is well run. </li></ul>
    15. 21. NINE BASIC PRINCIPLES <ul><li>2. The Board Speaks With One Voice or Not at All </li></ul><ul><li>Once a decision is made, the Board speaks with ONE VOICE </li></ul><ul><li>The power of Boards of Directors is not as individuals, but as a group, a corporate entity entrusted by their owners with the authority to govern and lead. The only way the Board can speak as the Board, then, is to bring its diverse points of view to one point. </li></ul><ul><li>The Policy Governance concept of “One Voice” allows diverse views and, if used thoroughly, prevents, or at least defuses, insurgent behavior because it enables healthy dissent. </li></ul><ul><li>Unless a Board masters the art of speaking as a group, it has little power to lead or to be effective. </li></ul>
    16. 22. NINE BASIC PRINCIPLES <ul><li>3. Board Decisions Should Predominantly Be Policy Decisions </li></ul><ul><li>Policy governance classifies policy types to ensure all organizational issues are covered. </li></ul><ul><ul><li>Ends : The Board defines which results are to be achieved, for whom, and at what cost. These mission related policies embody most of the Board’s long range planning. </li></ul></ul>
    17. 23. NINE BASIC PRINCIPLES <ul><li>3. (continued) </li></ul><ul><ul><li>Means : Once the Ends are established, the process by which activities, practices and methods are used to obtain results, are defined. Another term…. Operations </li></ul></ul><ul><ul><li>Executive Limitations : The Board then establishes the boundaries of acceptability and unacceptability within which the CEO can responsibly perform. These limiting policies therefore apply to CEO performance rather than to the staff/3rd party contractor Ends. The Staff/3rd party contractor Ends are defined via the CEO. </li></ul></ul>
    18. 24. NINE BASIC PRINCIPLES <ul><li>3. (continued) </li></ul><ul><ul><li>Board-staff linkage: The Board clarifies the manner in which it delegates authority to staff through the CEO as well as how it evaluates performance on provisions of the Ends and Executive Limitation policies. </li></ul></ul><ul><ul><li>Governance Process: The board determines its philosophy, its accountability and the effectiveness of its role. </li></ul></ul>
    19. 25. NINE BASIC PRINCIPLES <ul><li>4. Set Limits on Operational Means </li></ul><ul><li>The Board’s most effective impact over the CEO Means is to limit, not prescribe (Ends v. Means) </li></ul><ul><li>Preauthorizes CEO actions and decisions within boundaries and defines what is acceptable as well as unacceptable </li></ul><ul><li>Allows CEO reasonable creativity, flexibility and agility </li></ul><ul><li>The distinction between Ends and Means will enable the Board to free itself from trivia, to delegate clearly and powerfully, and to turn its attention to the large issues of Ends. </li></ul>
    20. 26. NINE BASIC PRINCIPLES <ul><li>5. Focus on the Ends (Results not the Journey) </li></ul><ul><li>Justification for any organization lies in what difference it can make. A non profit exists so that the world in which it operates is a better place. The Ends of an organization are the reasons for its existence. It is obvious that careful, wise selection of Ends is the highest calling of trustee leadership. </li></ul><ul><li>Ends determination is the pivotal responsibility of a governing Board </li></ul>
    21. 27. NINE BASIC PRINCIPLES <ul><li>6. A Board Should Define and Delegate - </li></ul><ul><li>(not manage) </li></ul><ul><li>Boards are accustomed to approving plans brought to them by the CEO. There are predictable problems caused by this traditional practice in that the very act of “approving” forces Boards to become entangled in trivia. Many times to avoid feeling like rubber stamps, Boards nit-pick. No matter how much intelligence goes into playing this reactive role, it is clearly not leadership. </li></ul>
    22. 28. NINE BASIC PRINCIPLES <ul><li>6. (continued) </li></ul><ul><li>The CEO’s plans can be judged on compliance with the Board’s Ends and defined Executive Limitation policies. </li></ul><ul><li>Having Board policies in place gives the Board and the CEO the ability to understand all the criteria by which an approval or decision should be made. </li></ul><ul><li>The CEO is then able to make the decisions necessary in conformance with established policies and report the results to the Board. No need to wait for the “next meeting” to get an approval! </li></ul>
    23. 29. NINE BASIC PRINCIPLES <ul><li>7. The Board Must Explicitly Design Its Own Products and Process </li></ul><ul><li>It is in the policy category of governance process that the Board states what it expects of itself. This important category of Board policy deals with a portion of the Board’s own means; how the Board will conduct itself and perform its own job. </li></ul><ul><li>Boards rarely articulate and hold fast to the principles guiding their own operation, making themselves appear directionless and even at times capricious. Under policy governance, the Board addresses itself directly and gives transparency to the owners/members. </li></ul>
    24. 30. NINE BASIC PRINCIPLES <ul><li>8. A Board Must Forge a Linkage with the CEO that is both Empowering and Safe </li></ul><ul><li>No single relationship in the organization is as important as that between the Board and its CEO. Probably no single relationship is as easily misconstrued or has such dire potential consequences. That relationship, well conceived, can set the stage for effective governance and management. </li></ul><ul><li>To accomplish an effective relationship we must attend to the Board’s job, the CEO’s job, and the link between them. </li></ul>
    25. 31. NINE BASIC PRINCIPLES <ul><li>9. Monitor performance rigorously, but only against established criteria. </li></ul><ul><li>When the Board has defined for its CEO the policies to achieve certain Ends , without violating defined Executive Limitations , monitoring performance becomes ……… no less and no more - than checking actual performance against these two sets of expectations. </li></ul>
    26. 33. The Key Benefits of Policy Governance <ul><li>Boards can focus on the future </li></ul><ul><li>Boards achieve meaningful control without meddling </li></ul><ul><li>Boards can delegate authority to others without abdicating its own role </li></ul><ul><li>Boards know how to evaluate organizational performance </li></ul><ul><li>The Board, its members, and the CEO know what’s expected of them </li></ul><ul><li>And… Board members can experience “making a difference” </li></ul>
    27. 34. Cool Things That Occurred! <ul><li>Effective Board with FULL accountability </li></ul><ul><li>Positive leadership and communication to the membership </li></ul><ul><li>Board stays out of all operations </li></ul><ul><li>CEO provides monitoring reports and provides documentation for compliance to policies </li></ul><ul><li>CEO meetings reduced from 17 to 5 annually </li></ul><ul><li>Effective CEO Succession Planning </li></ul>
    28. 35. Association Congress 2011 <ul><li>www. cacm .org </li></ul><ul><li>Thank you for your attention! </li></ul>