Policy governance is critical to success.

Today, there is increased pressure on boards to be accountable for the organizations they've been elected to serve. Perhaps, because of this, there seems to be more and more books, manuals, articles, and even organizations related to board development, improving board practices, and focusing on the role of governance. La Posada is a 20-year-old CCRC in Green Valley, Arizona. Its development was initiated in 1985 by a southern Arizona hospital that wanted to broaden its service to the larger community. In 1996, when La Posada spun off from the hospital and became a freestanding organization, it was an ideal time to create a new and different board structure.

We came across John Carver's concept of "policy governance" and were intrigued with the discipline yet freedom of his approach, which involves a high level of oversight and monitoring practices and necessitates clearly defined roles and responsibilities for both board members and management. Monitoring techniques range from direct inspection to use of external resources and a proactive focus on mission and the future of the organization. After nine years of commitment to policy governance, we strongly believe it has a clear and positive impact on the quality of services and the overall well-being of our organization. (We are not certified as Carver Policy Governance consultants.)

One may ask, "How do you get started?" The first requirement is the willingness to be a continuously learning and improving organization. The board and key staff become students of policy governance and its strengths, nuances, and practice. There are books and monthly newsletters, networking groups, consultants, and conferences available to learn how to create and implement this concept.

It begins with the development (or affirmation) of the mission. The board then must be able to articulate what needs are to be met, for whom, and at what cost. A common understanding of this leads to the development of "Ends" statements, which are written with a long-term perspective and embody the board's focus on long-range planning.

The Ends create a strong focus for everyone. At La Posada, we share our mission and our Ends (as well as our Values) with every new resident and every new employee. We discuss how our everyday decisions and activities are influenced by these highest level outcomes. In the nature of policy governance, the board does not get into operational detail but, as part of our monitoring system, we provide a list of key activities or accomplishments under the category of each End at each board meeting. This does not involve board discussion time but gives them information related to how programs link to the board-stated goals (Ends) and the amount of energy/activity staff is expending toward the achievement of these Ends.

Once the board knows what it wants, for whom, and at what cost, it needs to develop parameters for the CEO. Under our policy governance structure, the CEO is the only staff member that the board oversees or delegates to. All other staff members are the responsibility of the CEO. How can a board be accountable by giving so much authority to the CEO? This is where the parameters, called Executive Limitations, come into play. The board must establish the boundaries under which the CEO can operate and define its expectations in writing. These statements tell the CEO what must be avoided in the operations, management, and leadership of the organization. Areas of these limitations include how residents are treated, how staff is treated, how financial planning and expenditures occur, how succession planning is handled, etc.

Another key area for the board to define is its relationship with staff and the manner in which it delegates authority. Many times boards become dysfunctional and undermine the CEO's ability to take responsibility for the organization when they independently give direction to other staff. Staff may have conflicting instructions and individual board members may not be speaking for the board as a whole. In our policy governance structure, the board directs only the CEO.

The last of the key policy areas is board process. This is the area in which the board articulates its expectations of itself and its own members in how they go about their work. One particularly important concept is that of the board "speaking with one voice." Debate is encouraged, but when the board makes a decision, it is expected that all board members will support it.

Perhaps the key issue, in addition to a board willing to commit to this approach and a willingness to be "learners," is the process of board member selection itself. What type of individual can accept the role of governance and will be willing to forego micromanagement tendencies? La Posada's criteria include seeking individuals who: (1) have the ability to be visionary, (2) have had oversight of a whole company so they can understand business issues across the spectrum of the organization, (3) have moral courage and integrity, (4) are conceptual thinkers, (5) are able to support group consensus, and (6) believe in our mission.

La Posada also has a list of key principles upon which policy governance is based. Some of these include:

* The board governs on behalf of people not seated at the board table (there is no constituency representation).

* Board decisions should be predominately policy decisions.

* The board should define and delegate rather than react and ratify.

* The board must forge a link with management that is both empowering and safe.

* The CEO's performance must be monitored rigorously, but only against policy criteria.

At La Posada, we are "students" of policy governance. We have learned through practice and continual education. We are convinced it is the best way for us to operate. We remain focused and can evaluate policy governance by our results--the overall success of the organization, high levels of resident and employee satisfaction, positive community reputation, solid financial performance, and achievement of overall Ends.

We have experienced many benefits by using the policy governance approach. These include:

* Ability to recruit desired board members; many good people are weary of typical board processes and politics and avoid serving on traditional boards.

* Strong focus on mission; the board agenda primarily deals with planning and long-range strategies, and this makes the work more exciting and meaningful for everyone.

* Empowerment and alignment of management expectations related to board expectations; there is a sense of positive synergy when this happens, which leads to better results and higher satisfaction.

* Management is proactive and innovative, making it easier to recruit and retain good staff.

* Strong focus on accountability of everyone throughout the organization, leading to strong productivity and satisfaction.

* We found that the policy governance approach gave management the ability to pursue and achieve accreditation with ease, and that governance is an area in which accreditation entities are increasingly interested.

La Posada feels confident in its future, in large part because of its policy governance board structure, and recognizes that ongoing board development along these lines is critical to its success.

Lisa Israel is the President and CEO of La Posada at Park Centre, the first and only nationally accredited CCRC in Arizona. La Posada's board currently consists of seven board members. The La Posada program serves more than 700 residents, employs 450 staff, and actively serves the larger Green Valley community through rehab and community support efforts. For more information, phone [phone] or visit www.laposadagv.com. To send your comments to the author and editors, e-mail [e-mail].

RELATED ARTICLE: Board Members' Thoughts on Policy Governance

"Having served on many boards in the past, I feel that policy governance
is the way to go. We accomplish so much more and are able to place our
confidence in the staff to do the job they are hired to do. This way,
the board can concentrate on the jobs they are expected to do."
Sally Burbank
La Posada Board of Trustees

"Policy governance keeps us focused on the needs of our customers and
forces us to determine what is needed to meet (and exceed) their
expectations. No matter how much our residents (our primary customers)
enjoy being here, we know that quality can always be improved. Policy
governance provides the discipline for measuring and analyzing quality
improvement efforts."
John Riley
La Posada Past Board Chair

"Having served on a variety of boards at the local, state, and national
levels, my experience by serving on La Posada's board has been the most
pleasurable and productive, largely due to the policy governance process
we follow. The policy governance model contributes to the development
and character of a cooperative board chemistry between and among its
members, so that it has a significant impact on the discussion/decision-
making process."
Quentin Gessner
La Posada Board of Trustees

"The Board has carefully prepared itself for service. Its commitments
are written, systematically critiqued, and its members evaluate
themselves on their performance."
Don Shropshire
Trustee Emeritus