Policy Governance

Policy Governance, informally known as the Carver model, is a system for organizational governance. Policy Governance defines and guides appropriate relationships between an organization's owners, its board of directors, and its chief executive.

The Policy Governance approach was first developed in the 1970s by John Carver who has registered the term as a service mark in order to control accurate description of the model. The model is available for all to use without royalties or license fees and has been adopted by commercial, nonprofit, and public sector organizations.

There are ten Principles of Policy Governance.

Principles 1-3 define an organization's ownership, the board's responsibility to it, and the board's authority. Principles 4-7 specify that the board defines in writing policies identifying the benefits that should come about from the organization, how the board should conduct itself, and how staff behavior is to be proscribed. Principles 8-10 deal with the board's delegation and monitoring.

In general, if a board applies ALL of the principles of Policy Governance in its process and decision-making, then the board is likely practicing the model. If a board applies fewer than all the principles, it weakens or destroys the model’s effectiveness as a system.

Authors of the Policy Governance model say it is a paradigm shift from the traditional practice of governance and that it provides a clear differentiation between governance and management responsibilities in organizations.

Policy Governance begins with a definition of governance as "Seeing to it that the organization achieves what it should and avoids unacceptable situations." From this definition, board governance is at an arm's length from operations.

The board's primary relationship is with the organization's 'ownership'. As a result, governance is a downward extension of ownership rather than an upward extension of management. In this space, the board, as a single entity, assumes a governance position that is the link between ownership and the operational organization. That governance position is a commanding authority. The board exists to exercise that commanding authority and to properly empower others. "Proper empowerment" means to define the results to be achieved by the organization (Ends), and define what would be considered unacceptable in terms of ethics and prudence (Executive Limitations). The board delegates the job of achieving its Ends within the parameters defined in policy to the CEO. To complete the delegation, the board rigorously monitors performance to policy to uphold accountability of the CEO.

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