Skip to main content

Board governance models: which one is right for you?

Board governance models: which one is right for you?

Group of people discussing report and working together

What kind of governance model should your company's board follow? 

The first time I got a job as an Executive Director, in the late 1990’s, everyone was talking about the Carver Model of Governance. I had no idea at the time that there was such a thing as a ‘model of governance.’ The strict adherents to the Carver Model studied it, developed policies and educated the rest of the board. The Carver Model was touted as the gold standard model of governance.

In my agency however, the previous Executive Director had attended a course and told the board how they should act to be a “Carver Board.” By the time I arrived on the scene, either by his education of the board or by their interpretation and training of new directors, they had created a number of unnecessary rules about how boards should behave.

Although I occasionally still hear boards refer to themselves as a “Carver Board”, it is much more common for this type of board to be described as a Policy Governance Board. Despite an explosion in governance training, boards often do not know what type of board they are; or if they do identify as a specific type of board, they fail to follow that model.

It is time for boards to stop trying to be something that they are not and to stop apologizing for how they operate. Boards should identify the most appropriate work that they should do given their current developmental phase, and be clear about their role.

Moving between operational and policy governance models

Almost every board begins as operational. Since few agencies start with staff, the board must ‘operate’ the agency until there is a paid staff member or sufficient volunteers to remove this expectation from the directors. Even after staffing is in place, many boards continue to perform certain operations within the board, leaving staff to implement programs.  

Generally, as agencies become larger and a lead administrative staff member is hired, boards step away from direct operations (such as bookkeeping, human resources, funder relations, etc.) and begin to focus on setting strategic direction, establishing governance policies, and hiring and supervising their main staff member, the Executive Director. Ideally, the board will by then have extensive policies outlining the relationship between the Executive Director and board members.

However, the transition from one board type to the other is rarely linear, perfect or permanent. There are good and bad reasons for boards to waiver between operational and policy governance models:

  • During periods of transition, significant growth, change of mandate or substantial threat to the agency, a policy governance board may be drawn into the operations of the agency.
  • If some board members fail to see the value in serving as a policy board and are unable to help themselves from being drawn into the details of operations.
  • When one or more director has a personality clash with the Executive Director, they may engage in operational meddling in an effort to find ammunition to remove this key staff member from office.
  • When the Executive Director provides too little information for the board to fulfill its fiduciary obligations, board members may resort to becoming more involved in operations to assure themselves that the agency is on solid ground.
  • If a board has fulfilled its strategic mandate, and is not able to move into the visionary role of setting long-term strategy, they may default to operations to feel relevant.

How does a board identify what is right for them?

In an ideal world, board members and Executive Directors would obtain extensive training in Governance, would adopt and follow appropriate governance policies, and would complete regular self-evaluation to ensure that they continue to operate as their governance model intends. However, the reality is that most governors and even most Executive Directors learn governance “on the fly.” They rely on the advice of governors who have served on other boards but who may or may not have accurate information about the role of boards.  

Agencies that can afford to have customized Governance training should do so. The training should be based on their specific agency and its needs. It should recognize that Policy Governance is not right for every nonprofit and that there is such a thing as an appropriate hybrid of Policy and Operational Governance for some agencies, especially smaller ones.

One great and inexpensive way for boards to identify their most appropriate roles is to review governance accreditation standards. Imagine Canada’s Standards Program not only outlines the most significant rules for governance; they provide the added benefit of offering different and more realistic standards for smaller organizations.

What if my board is operational?

I suggest that smaller boards stop apologizing for having directors involved in operations. It would be completely illogical for an agency with a budget of less than $100,000 to have the same model of governance as a hospital or university. Yet, often, these small agencies are held to the same standards as larger ones. 

Boards should compare themselves to the standards outlined by an accreditation program that is relevant to their size. If they are struggling to meet those standards, they may wish to engage assistance in developing their governance model. If they are meeting the standards and their agency is operating effectively and meeting appropriate strategic priorities, it is time to stop looking up, to recognize their own competence in managing appropriately to their size, and to celebrate the great work that these smaller agencies can do on a shoestring budget.

Guest contributions represent the personal opinions and insights of the authors and may not reflect the views or opinions of Imagine Canada.

Subscribe to 360°
Stay up-to-date about the latest news, events and opinions across the sector.
Unsubscribe at any time through the link in our email footer.
Imagine Canada | 65 St Clair Avenue East, Suite 700, Toronto, ON M4T 2Y3
info@imaginecanada.ca
First and Last name
Language
Related blog post

Sector Stats

Get to know Canada’s social sector! Explore this infographic to learn about the size, scope, and economic contribution of charities and nonprofits across Canada.

Related Resource

Partnering for Impact: From Crisis to Opportunity