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John M' Nielsen, ARM

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Group discussion and Q&A. History of Policy Governance: Based on the ... AGRIP adopted model beginning in June,1999 - Aspen Group facilitated early efforts ... – PowerPoint PPT presentation

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Title: John M' Nielsen, ARM


1
Policy Governance
Success Starts At The Top
AGRIP Board Orientation January 29, 2007
  • John M. Nielsen, ARM
  • CEO, Ohio Transit Risk Pool
  • President, Transit Reinsurance, Ltd.

2
Todays Agenda
  • History of Carver Governance Model
  • Overview of Policy Governance
  • Ends Policies
  • Executive Limitations Policies
  • Governance Process Policies
  • Board-Staff Relations Policies
  • Group discussion and QA

3
History of Policy Governance
  • Based on the work of John Carver
  • Model used by hundreds of public entities across
    the United States
  • AGRIP adopted model beginning in June,1999 -
    Aspen Group facilitated early efforts

4
The Challenge of Board Service
  • Critical but often difficult role
  • Role is poorly definedif at all
  • Little or no training or preparation
  • CEO-types often lack Board Discipline

Very competent individuals can come together to
form a very incompetent Board. - John Carver
5
Typical Governance Problems
  • Lack of proper focus and forward (future)
    direction
  • Lack of role clarity leads to border incursions
  • Board loses control of its agenda
  • CEO loses control of management responsibilities
  • Reactive, backwards looking, Fix-It orientation
  • Result Organization neither well led nor managed

6
Ten Principles of Policy Governance
7
Ten Principles of Policy Governance
8
Ten Principles of Policy Governance
9
Ten Principles of Policy Governance
10
Ten Principles of Policy Governance
11
A Comparison Between...
  • Traditional Board Policy
  • Policy Governance

12
  • Policies Fall into 4 Quadrants

Board-Staff Relations (BSRs)
Ends
Governance Process (GPs)
Executive Limitations (ELs)
13
  • Policies Fall into 2 Work Hemispheres

Board Activities
CEO Activities
Ends
BSRs
GPs
ELs
14
  • The end results desired for the organizations
    clients
  • Provide criteria to measure performance

15
  • Explicit policy statements of what the CEO
    is NOT permitted to do
  • Anything not identified in Executive

    Limitations may be done by CEO in
    pursuit of Board Ends

16
  • Delegation of Authority to CEO
  • Defines how Board and CEO, its only employee,
    will operate with each other
  • CEO reports ONLY to full Board
  • Board directs CEO ONLY
  • CEO evaluated on ONLY two criteria
  • Achievement of (Board prescribed) Ends
  • Avoidance of Violations of Executive Limitations

17
Establishes how the Board will operate
  • Defines Boards job description and ground rules
  • Establishes standards of behavior, roles,
    commitments and code of ethical behaviors

The Board of Directors is one entity. It is NOT a
collection of individuals
18
Board Role
  • Linkage to the ownership
  • Defines explicit values about
  • Ends
  • Executive Limitations
  • Board-Staff (i.e., CEO) Relationships
  • Governance
  • Assures executive performance
  • Evaluates resources consumed vs. benefits
    gained

19
Monitoring Process
  • Every policy monitored by pre-determined
    process on pre-determined schedule
  • Internal or external reports
  • Direct inspections
  • Board self-assessment
  • Ends Measurement
  • Measure what you hope to accomplish
  • A crude measure of the right thing is better
    than a reliable measure of the wrong thing.
  • Linkages with Clients/Owners

20
Benefits of Policy Governance
  • Allows Board to add value and focus on the
    future
  • Focuses Boards attention on End Results
  • Frees CEO to do job and avoid Board
    micromanagement
  • Provides clarity of roles reducing Board/CEO
    conflict
  • Makes policy the single driver for organization
  • Increases accountability for results
  • Aligns total resources of organization
  • Improves relationship with owners

21
AGRIPs Experience with Policy Governance
  • Has taken time to make the transition
  • A struggle at timesparticularly for new BMs
  • Discovered need for orientation/training
  • Identified Need for New Linkage Opportunities
  • We are finding what is valuable to us what
    works, what doesnt
  • Addressing challenges

22
Challenge 1 Clarifying Roles
Policy Governance changed the role of the Board
  • The meeting agenda, the types of information
    shared, and the issues have changed
  • What issues are in the Boards arena?
  • Do we create new policy or amend old policies?
  • Weve often had to stop ourselves to ask

Is this the Boards work or the CEOs? Is this
a policy level issue and what is policy?
23
Challenge 2 Determining our Owners
  • Why does this organization exist? For the
    benefit of whom?
  • We believe the member pools are the ultimate
    owners
  • Had to distinguish between our owners and
    other stakeholders/clients

24
Challenge 2 Determining our Owners
  • Other stakeholders
  • Partner Members
  • Pool Boards, CEOs Staff
  • Governmental Agencies
  • Other professional organizations

25
Challenge 3 Linkage Activities
  • 1st Step Who should we be hearing from? What
    groups have interests that bear engagement?
  • We decided all the stakeholders have important
    perspectives that should be tapped periodically
  • 2nd Step How can we best create linkages with
    our various groups?
  • We decided to meet on a rotating basis with the
    various constituent groupsusing a focus group
    approach.
  • Some AGRIP sessions set aside.

26
Challenge 4 Setting Ends
  • Often tedious and time-consuming process
  • Critically important
  • Ends determine what benefits? for whom? at what
    cost?
  • Start with the broadest ends and drill down to
    more and more specific sub-ends

27
AGRIPs Ends Statements
1. Vision Statement Org. Mission
As the recognized authority on and resource for
information on inter- Governmental pooling, AGRIP
is the leading national association for pool
management.
As a result of our efforts, the pooling community
is united to achieve excellence in pool
governance, management and services.
28
AGRIPs Ends Statements
2. Effective Governance Mgmt.
As a result of our efforts, members shall have
information, knowledge, and skills necessary to
effectively govern and manage their
pools. Sub-Ends 2.1 (a) Increasing pressure on
price (b) Impending transition of pool
leadership from the first generation to
the next (c) Competition from
brokerage/insurance firms (d) Aging
population (e) Reduced government resources
29
AGRIPs Ends Statements
3. Member Satisfaction
As a result of our efforts, members shall have
confidence that their common needs are addressed
and represented with dependability, reliability,
and professionalism and to the highest standards
of excellence.
30
AGRIPs Ends Statements
4. Advocacy
As a result of our efforts, members shall have an
effective advocate for the advancement and
promotion of pooling. Sub-Ends 4.1 These
efforts shall address the issue of producer
com- pensation, both internally and
externally.
31
Challenge 5 Measuring the Ends
  • Unless specified by the Board in the Ends
    Policies, it is the CEOs role to decide how to
    best measure the accomplishment of the Ends
  • Board monitors/determines whether the CEO
    reasonably interpreted the Ends and whether or
    not there was progress towards the Ends
  • Board always has ability to set new Ends

32
Your Turn
  • QA
  • Share your experiences with Policy Governance

33
Policy Governance
Success Starts At The Top
AGRIP Board Orientation January 29, 2007
  • John M. Nielsen, ARM
  • CEO, Ohio Transit Risk Pool
  • President, Transit Reinsurance, Ltd.
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