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From the Board: Policy Governance PDF Print E-mail

by Tom Franks
January 2014

I have a history with Policy Governance.  As a member of another board, I helped that co-op adopt its first set of governance policies. Since election to the BFC board, I have adopted the sobriquet of “policy wonk” and have occasionally served in that role.  I had a conversation in the meat aisle last month with a Co-op shareholder about policy governance. It’s clear to me that policy governance may have a bad rap among some at BFC. Maybe a few words on this will help.

Here’s a brief summary of the Principles of Policy Governance:
1. Ownership The board is the informed voice and agent of the owners.
2. Position of the board It is accountable to the owners for the success of the organization.
3. Board Holism Authority is held and used by the whole. Often expressed as “The board speaks with one voice” both inside the Co-op and to the outside world.
4. Ends Policies Expectations defined in writing that define what benefits the Co-op is intended to produce, for who, and at what cost.
5. Board Means Policies describe how the Board is expected to do its own job.
6. Executive Limitation Policies set the boundaries of acceptable means for the operational manager, in our case the GM. Instead of telling the GM in exhaustive detail what can do, we define those actions that are unacceptable, thus allowing more creativity and flexibility.
7. Policy Sizes We strive to define each policy as broadly as possible, driving down only to the point that we are willing to accept any reasonable interpretation. For example, our Ends includes “an emphasis on healthy, locally grown, organic and fairly traded” but does not say how much local organic kale we must sell.
8. Clarity and Coherence of Delegation Delegation of the responsibility for outcomes (a successful Co-op)  and authority to achieve them (the GM’s powers) “must be unambiguous.”  
9. Any Reasonable Interpretation Detailed decisions about Ends and operational means are delegated to the GM, who has the right to use any reasonable interpretation of the policies.
10. Monitoring Review of Co-op accomplishments and GM’s interpretation of the policies based on data. This provides an evidence-based approach to course corrections (change in policy) and GM performance review.

Our primary accountability is defining the Ends, Means, and Executive Limitations policies and monitoring (or checking) our performance in relation to these. The take-away is that our policy manual is a tool that BFC has adopted to make it clear, in writing, the reason of board existence and the roles of the board and management.
According to the International Policy Governance Association (IPGA), “Policy Governance is a comprehensive set of integrated principles that, when consistently applied, allows governing boards to realize owner-accountable organizations.”  The most important concept in my opinion is owner-accountable. The board aspires to be the voice and agent of the owners. It is accountable to the owners for the success of the organization, and as such is not merely an advisory body, but an active and essential link in the flow of power and accountability between the people who own the Co-op (you, the shareholders) and what happens at the store and beyond. However, as a volunteer board we cannot and, in my opinion, should not be directly involved with running the store. For this reason, we delegate the authority you have vested in us to the General Manager.   

Your board aspires to comprehensively and consistently adhere to the set of integrated principles of Policy Governance. Our greatest struggles may be with delegation. We have the all-too-human urge to fix things, to respond to our friends and neighbors when they say “the Co-op should….”  But, really, it’s not our job. Our primary jobs are to clearly and concisely state what the shareholders want the Co-op to do and to check on progress. We’re like the “Federation Council.” We define the mission for the starship Enterprise, issue the “Prime Directive” and other general orders, and check-in regularly with Captain Kirk to see how it’s going. We don’t get involved with system failures in the replicator (Darn, the coffee’s off again), nor do we consult with Captain Kirk when Klingon photon torpedoes are incoming. You, by the way, are the citizens of the United Federation of Planets in this story, largely off screen, but it’s all working for your benefit.

Policy Governance is an important part of the conversation about the Brattleboro Food Co-op’s past, present, and future. There are great resources on it available on line and in print. A good place to start is with the words of John Carver, an authority on this model. A pretty good overview is available at www.carvergovernance.com.  I find the closing lines inspiring - “The Policy Governance model provides an alternative for boards unhappy with reactivity, trivia, and hollow ritual—boards seeking to be truly accountable. But attaining this level of excellence requires the board to break with a long tradition of disastrous governance habits. And it offers a challenge for visionary groups determined to make a real difference in tomorrow's world.”

 

The Board of Directors
will be tabling again in January and February! Saturday, January 11, and Saturday, February 22 from 2 to 4 p.m. in the store. Stop by and have a cup of tea!