The board of Evergreen Retirement Community, a non-profit continuing care retirement community based on Christian values, has followed the principles of Policy Governance since 2002.   I believe that this has been at the heart of our effectiveness in establishing a thorough succession planning process for the CEO position which was completed in March, 2005 and that many other boards could benefit from seeing Policy Governance as an aid to creating sustainable organizational culture.    

Of course, boards using Policy Governance do not directly determine the operating culture of their organizations since they are not managing day to day operations.  That responsibility is delegated by the board to the CEO they select.  The board does however have the responsibility for defining the vision of what the organization desires to accomplish in regard to consumer/customer/ recipient outcomes, and for creating policies that provide the legal, ethical and prudential boundaries which will guide the approach used to move toward the vision.   

In selecting the CEO, the board should identify a person who is totally committed to upholding their values and vision as reflected in their policies, and is therefore likely to create and sustain an organization culture that reflects those values and supports continuous movement toward the vision.  And, by having created such policies, the board has in effect also automatically identified organizational performance indicators that the CEO must use to show progress toward the vision and the upholding of the values in monitoring reports.  And, it is these monitoring reports alone that will be used to monitor the ongoing effectiveness of the CEO's leadership – making them powerful tools indeed.   

Yet with Policy Governance, individual CEOs are still left a great deal of freedom to create the kind of culture that they believe will be most conducive to producing the Ends.  Some may go for a culture that centers very explicitly on results creation, some may go for a very staff-centered culture and still others may seek to create a customer oriented culture.  Some may seek a very consultative culture, others a fast-moving culture, and still others a learning culture.  And, as far as the board is concerned as long as the organization is actually accomplishing its Ends and staying within its boundaries of ethics, the law and prudence, all is well.  For the board can rest assured that the legal and moral owners’ core values are protected.   

Thus, with Policy Governance, a change in CEO may change the organizational culture to some degree but its core values including the difference it is seeking to make in the world will remain substantively change. Going further, Policy Governance insures a constancy of general board direction that can encourage, support, and sustain a desired organizational culture over many decades through the inevitable changes in CEO’s and individual board membership. 

At Evergreen Retirement Community, our recruitment process involved multiple internal candidates being identified, assessed, and developed for the position.  One was selected as the new CEO and an extremely smooth transition effected resulting in minimal change to the culture of the organization, which was a board objective.   I do not believe that this could have been accomplished without the board’s use of a systematic, comprehensive, integrated approach to governance such as found in the principles of Policy Governance.   

Having Policy Governance principles to guide the board in developing a set of policies that address all of the governance responsibilities, having the board over time progressively refining those policies in response to changing internal and external conditions and the increasing wisdom gained from the experience of governing enables the development and maintenance of core values to a level not otherwise possible.   The way that the policies all weave together to creates a unified whole that does not exist where policies are developed one-at-a-time in responses to problems and issues.  Well developed policies allow the board to be in control of the organization without being controlling, and the CEO to have the freedom to be innovative and proactive without the risk of going out-of-bounds.  

David Green can be contacted at:  dgreen@evergreenoshkosh.com