How does a board decide what is acceptable for it to do and what is not? The answer is “governing principles.” But what are governing principles?
Governing principles are the rules a board develops and agrees upon to guide and control how it will govern. They are necessary, as they inform the board as a whole and its individual directors what they can or cannot do. Without them confusion can rule.
Imagine a ball placed on a playing field surrounded by a sports team with a referee telling them to go ahead and start playing but not telling them the object of the game or any of its rules. Either players will stand around and do nothing or some players will start doing something with the ball and others won’t know how to react. Neither response is helpful, and both will result in frustration and dissatisfaction.
Sports teams cannot function if they do not know the object of the game and the rules they are to follow. Neither can boards.
Why boards need governing principles
Governing principles are rules adopted by a board to ensure it is, in fact, governing – as opposed to getting involved in the management or operations of the organization it governs.
Following is an example of a governing principle: ‘The only decisions or positions of the board are those made by the board in a legally convened board session and through its accepted decision-making process.’
If directors are not given a copy of the board’s governing principles as part of their orientation session, they will have no idea of how the board operates and what is acceptable for them to do or not to do as it relates to the board’s roles and responsibilities. In the absence of rules, some directors could innocently or naively take actions that are unacceptable.
However, this is unlikely to happen if the board has governing principles and all directors have a copy that they have read and understood.
There is no need for a board to create a new set of governing principles every year, but it would be worthwhile for the board to review the existing ones to determine if they are still valid, if new ones are needed or if any require updating.
Trying to govern without governing principles in place is asking for trouble. In our work, we see directors doing things they should not do, particularly relating to interactions with staff. Because their board lacks governing principles, they think it is acceptable. This then leads to tensions between the executive director and the board; before long, unhealthy board/staff relationships develop.
Governing principles can stop a lot of problems from happening. If your board does not have any, now is the time to get them.
To find out other ways your organization can better succeed, feel free to visit www.governance.ca, call 250-465-1245 or email colin@governance.ca.
Article written by Vince Battistelli