Chairing the Board

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Chairing the Board

• A Key Component of Best-Practice Governance

Steve Smith and David Gray
MEI Boards Forum, August 2006
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Overview of Workshop

• Heres what well aim to cover
• a little bit of governance theorywhat
  does best practice look like? (20 mins)
• the role of the Chair in best practice (20
  mins)
• questions, discussion (10 mins)
• Probably best to keep most questions until the
  discussion time.

Chairing MEI Boards Forum, August 2006
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David Gray

• trustee for five years, chairperson for two
• business backgroundbanking and finance,
  management consulting, local government
• currently a governance coach and consultant
  working with (mainly) Maori organisations
  developing governance capacity, including
  one-on-one coaching of Chairs
• definitely not an education professional

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Part 1Governance Theory
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Principles

• The reason for starting with basic principlesis
  to peel away our preconceptions and
  misconceptions about governanceits better to
  begin with a blank sheet of paper and start from
  scratch in thinking about governance, and
  therefore about chairing.
• These principles are generic and may be applied
  to governance in any setting.
• (Ill race through the principles today, because
  they are not the focus of the workshop.)

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Principle 1

• Every organisation exists to make a difference.

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Principle 2

• Every organisation has ownersbe they legal
  owners (as with a company) or moral owners (as
  with a school).
• This is the group on whose behalf we are
  governing the school.
• Key board responsibility be very clear about
  who our owners are.

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Principle 3

• The board is a subset of the owners when the
  board speaks, it is the voice of the owners.
• Implication
• the board must have in place
  effective processes for listening to the views
  of its owners

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Principle 4

• The role of the board of any organisation is to
  be accountable to the owners for ensuring that
  the organisation makes a difference.
• Implication
• the board must ensure it understands what
  difference the owners want to be made

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Principle 5

• There are always two parts to making a
  differ-enceachieving desired outcomes and
  avoiding unacceptable outcomes.
• Implication
• the board must be clear not only about
  what must be achieved, but also about what
  must be avoided

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Principle 6

• The board has authority, on behalf of the owners,
  to make a difference.
• Implications
• all authority resides with the board until
  the board chooses to delegate part of it (NB
  this includes the authority of the Chair)
• delegating authority is a critical function,
  so the board must have systematic ways of
  doing so

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Principle 7

• In governance thinking, authority and
  accountability are inseparable.
• the board has authority to govern, but is
  accountable to the owners for the
  governance it exercises
• the board delegates part of its authority to
  the CEO, whereupon the CEO becomes
  account- able to the board for the use of that
  authority
• the same is true for the Chair

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Principle 8

• Authority and accountability are vested in the
  board as a group, not as individuals.
• Implications
• individual board members (including the
  Chair) have no individual authority
• the board speaks through properly-authorised r
  esolutions at properly-constituted meetings
  (the one-voice principle)

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Principle 9

• The focus of the board is on governance, noton
  management.
• the lengths to which boards go to populate
  themselves with members whose skills mirror
  those of the senior management team strongly
  suggests that they see their role as being to
  second-guess management (note comment at end of
  workshop)

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Principle 10

• While the board governs the organisation and
  determines (on behalf of the owners) what
  out-comes must be achieved, the actual
  achievement of these outcomes is delegated to
  management.
• the board needs to do all it can to ensure
  the success of management
• the board needs to be very clear about -
  what is being delegated - to whom it is being
  delegated and - how and when the delegation
  will be monitored

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Principle 11

• In addition to setting expectations for
  manage-ment, the board will also set expectations
  for itself, for its Chair and (if appropriate)
  for its committees.
• in relation to its own processes, the board
  also needs to be clear about - what is
  being delegated - to whom it is being
  delegated and - how and when the delegation
  will be monitored

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Principle 12

• Board authority for achieving operational
  out-comes is delegated in the first instance to
  the CEO and thereafter by the CEO to others.
• accountability for achieving desired
  outcomes is thereby vested solely and
  specifically in the CEO
• sufficient authority needs to be delegated
• its the CEOs prerogative to determine the
  division of labour
• a parallel process applies to the Chair

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Principle 13

• The role of CEO is created and governed by the
  board, not vice versa.
• this is a generic proposition which holds
  true in almost every situation
• but which is complicated a little bit by
  the statutory basis of education in New Zealand
• key implication the board is accountable
  for the performance of the CEO the CEO is
  not accountable for the performance of the board

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Principle 14

• The boards expectations of the CEO must be
  clear.
• the difference to be made (and to be
  avoided) must be clearly spelt out in
  board resolutions
• the varying and ad hoc expectations of
  individual board members carry no weight
• Likewise, the boards expectations of the Chair
  must be clear.

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Principle 15

• Delegation to the CEO must be uncompromised.
• the board must be very careful not to
  compro- mise the accountability of the CEO
  through the delegations it makes to board
  committees or to anyone else

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Principle 16

• Monitoring of organisational performance (and
  therefore CEO performance) takes place against
  previously-expressed expectations of the board.
• the board cannot make up expectations on the
  spot against which to judge the CEO
• monitoring of the CEO and performance
  feedback should take place continuously through
  out the year
• Similarly, the performance of the Chair should be
  evaluated.

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Principles

• These principles form a logical, coherent,
  integrated way of looking at governance froma
  theoretical perspective.

So, how do we move from theory to practice?
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Practice

• There is a complete, integrated system of
  governance available to boards, based on (and/or
  incorporating) the propositions
• called Policy Governance
• developed during the 1970s, now widely
  practised around the world
• well-suited to the school environment
• its the system we use at PHS

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Four Key Questions

• The simplest way to describe Policy Governance is
  to think of it as answering the following four
  questions
• what difference do we want to make?
• what outcomes must be avoided as we make this
  difference?
• how will we organise ourselves?
• how will we relate to the CEO?
• The answers form four sets of policies (hence
  Policy Governance).

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1 What DifferenceDo We Want to Make?

• The board cant control everything that goes on
  within the school, but it canand mustcontrol
  the definition of success.
• This introduces a key concept ENDS.
• Under this system of governance, statements about
  what is to be achieved (the difference to be
  made) are called ENDS, or ends policies.

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1 What DifferenceDo We Want to Make?

• Definition of END

• What benefits or outcomes do we want to achieve?
• For which students or groups of students do we
  want to achieve them?
• At what cost (or in what order of priority) do we
  want to achieve them?

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1 What DifferenceDo We Want to Make?

• Definition of END
• what good do we want to achieve?
• for whom do we want to achieve it?
• at what cost, or in what order of
  priority, do we want to achieve it?

The board makes these decisions, on behalf of the
schools community, based on the values in its
charter and its understanding of the comm-unitys
expectations.
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Sample Ends Policy
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1 What DifferenceDo We Want to Make?

• Having stated where the school is heading (i.e.
  the ends), the board has an important choice to
  make about what it says about the means of
  achieving the ends.
• In a nutshell, the board can choose to be either
  prescriptive or permissive.
• This is best explained diagrammatically

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(a) Prescriptive
(b) Permissive
?
PERMITTEDACTIONS

• PROHIBITEDACTIONS

You may only take the actions in the smaller
circle.
You may take any action other than those in the
smaller circle.
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2 What OutcomesMust Be Avoided?

• So, the CEO is given the freedom (and the
  respons-ibility) to choose the means that will be
  used to achieve the ends, but
• the board is required to state what means are
  unacceptable.
• This introduces another key concept MEANS.
  Under Policy Governance, means are defined as
  anything that is not an end.

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1 What Difference Do We Want to Make?2
What Outcomes Must Be Avoided?

• The board develops a set of ENDS policies (using
  prescriptive language) saying where the school is
  heading.
• The board develops a set of LIMITATION policies
  (using permissive language) saying what must not
  be allowed to happen along the way.

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1 What Difference Do We Want to Make?2
What Outcomes Must Be Avoided?

• In doing so, the board is saying

• we take responsibility for everything
  that happens within the school
• we do not seek to control every little detail
  of what happensjust the things we
  must control, namely
• where the school is heading and
• what must not happen along the way
• we are empowering the CEO/Principal to be the
  professional leader of the school.

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1 What Difference Do We Want to Make?2
What Outcomes Must Be Avoided?
3 How Will We Organise Ourselves?
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3 How Will WeOrganise Ourselves?

• The board needs to state how it will organise
  itself, including
• how it will govern (e.g. its
  governance philosophy the values it will
  apply)
• how it will relate to the schools community
• the scope of its role
• the role of the chairperson
• etc

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3 How Will WeOrganise Ourselves?

• The board needs to state how it will organise
  itself, including
• how it will govern (e.g. its
  governance philosophy the values it will
  apply)
• how it will relate to the schools community
• the scope of its role
• the role of the chairperson
• etc

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1 What Difference Do We Want to Make?2
What Outcomes Must Be Avoided?3 How Will We
Organise Ourselves?
4 How Will We Relate to the CEO?
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4 How Will WeRelate to the CEO?

• The board needs to state how it will relate to
  the CEO/Principal, including
• how it will communicate its expectations
  to the Principal
• the nature and extent of the
  Principals accountability
• when and how it will monitor the
  perform- ance of the Principal
• etc

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Practice

• The board governs using four sets of policies
• ends policies (which state where the
  school is heading)
• limitation policies (which state what must
  not be allowed to happen along the way)
• board governance policies (which state
  how the board will function)
• linkage policies (which state how the board
  will relate to the Principal)

And thats itthere are NO other policies.
Chairing MEI Boards Forum, August 2006
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Practice

• Policy Governance
• is a complete, logical system of governance
• is built on the foundation of the values of
  the schools community
• is deeply empowering for the Principal and
  staff
• fundamentally changes the way the board works
• makes the boards job crystal-clear
• requires an increased level of group
  discipline
• requires the board to take the lead in
  shaping the future of the school, and therefore
• requires the Chair to take the lead in
  shaping the performance of the board

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Part 2The Role of the Chairperson
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Role of Chairperson

• Key points
• starting point all authority and
  accountability are vested in the board, until
  such time as the board chooses to delegate some
  of it therefore, the Chair has whatever
  authority the board has chosen to delegate to
  the position
• this authority and accountability should be
  set out in a resolution of the board (as part of
  the board governance policies)
• the essence of the Chairs role is to ensure
  that the board complies with its own
  policiessee sample policies (page 22)

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Role of Chairperson

• Key points (cont.)
• Chair has authority to make decisions in
  relation to board governance and linkage
  policies

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Practice

• The board governs using four sets of policies
• ends policies (which state where the
  school is heading)
• limitation policies (which state what must
  not be allowed to happen along the way)
• board governance policies (which state
  how the board will function)
• linkage policies (which state how the board
  will relate to the Principal)

And thats itthere are NO other policies.
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Role of Chairperson

• Key points (cont.)
• Chair has authority to make decisions in
  relation to board governance and linkage policies

• Chair may use any reasonable
  interpretation (same as Principal)
• PHS has granted Chair authority to oversee
  preparation of agenda, within stated limits
• Chair is authorised to do usual tasks of
  chairing meetings (Act preside)
• Chair has no authority to supervise or
  direct Principal

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Role of Chairperson

• Key points (cont.)
• Chair may be the mouthpiece of the board,
  but only to state board-approved positions or
  policy

• Chair may delegate, but remains accountable

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Role of Chairperson

• Meetings
• Chair should have responsibility to shape
  these
• under Policy Governance, meetings should
  be quite different to traditional
  governance should follow this kind of format
  (see example)
• elected-member time
• very brief administrative item (see example)
• matters for strategic discussion
• matters for decision
• matters for reviewing/monitoring
• matters for information

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Role of Chairperson

• Meetings (cont.)
• for every item that is considered for
  inclusion in the agenda, there is a decision
  process to be followedsee flowchart

• similar process is then followed
  when discussing items during meeting
• Chair has a responsibility to ensure
  compliance with the boards own code of conduct
  (see page 16)
• board processes should include
• regular self-review (see example)
• periodic review of the Chair

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Role of Chairperson

• Meetings (cont.)
• Chair also needs to be familiar with
  LGOIMA how many boards strictly observe s46A?

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7 An item that is not on the agenda for a
meeting may be dealt with at the meeting
if (a) The local authority by resolution so
decides and (b) The presiding member explains
at the meeting at a time when it is open to
the public, (i) The reason why the item is not
on the agenda and (ii) The reason why the
discussion of the item cannot be delayed
until a subsequent meeting. 7A Where an item
is not on the agenda for a meeting, (a) That
item may be discussed at that meeting
if (i) That item is a minor matter relating to
the general business of the local authority
and (ii) The presiding member explains at the
beginning of the meeting, at a time when it is
open to the public, that the item will be
discussed at the meeting but (b) No resolution,
decision, or recommendation may be made
in respect of that item except to refer that
item to a subsequent meeting of the local
authority for further discussion.
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Role of Chairperson

• In summary
• Chair has a specific job to do, just like the
  CEO (note the term CGO)
• Chair requires the authority of the board to
  do this job, just like the CEO
• Chairs job is what the board decides it
  should be, not what tradition dictates
• Policy Governance is an ideal system to
  give structure to the Chairs role (and the
  CEOs) it makes the separation between
  governance (the Chairs responsibility) and
  management (the CEOs responsibility)
  absolutely clear

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Role of Chairperson

• Comment in conference programme How well are
  you coping with leading a group of trustees that
  includes trained professional educators?
• what does the comment imply?
• think back to the diagram, and the
  difference between ends and means

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(a) Prescriptive
(b) Permissive
PERMITTEDACTIONS

• PROHIBITEDACTIONS

You may only take the actions in the smaller
circle.
You may take any action other than those in the
smaller circle.
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Role of Chairperson

• Comment in conference programme How well are
  you coping with leading a group of trustees that
  includes trained professional educators?
• what does the comment imply?
• think back to the diagram, and the
  difference between ends and means

• remember, the board doesnt say anything
  about the means used by management to achieve
  the endsthe boards focus is on ends
• professional educators play the same role
  as every other board member in determining ends

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Where To From Here?

• PHS is really hoping to stimulate the
  formation of a community of New Zealand
  schools committed to Policy Governance
• forthcoming book Making a Difference
• website www.makingadifference.co.nz
  hope to use this as a vehicle to build the
  community
• sample policies available on this site

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Questions?
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Chairing the Board

• A Key Component of Best-Practice Governance

Steve Smith and David Gray
MEI Boards Forum, August 2006