POLICY GOVERNANCE (PG)

Fare Share Co-op Policy Governance Register (Current, FEBRUARY 28, 2018)

The Fare Share Board operates using the Policy GovernanceTM model, which was developed to allow Boards to maintain accountability for organizational performance while focusing on providing visionary leadership around the Co-op's ‘big-picture’ mission. With the recognition that delegation is a significant component of our accountability, the Board maintains written documentation of expectations for the Co-op, our General Manager, and ourselves. Our policies are the primary vehicle for recording these expectations, and they are monitored on a regular basis.

The relevance of this methodology stems from (1) the fact that a significant volume of information is required to fulfill our fiduciary duties; (2) the need to delegate authority in order to accomplish our organizational purpose; and (3) the desire to ensure that our Owners and stakeholders are well-served by organizational accomplishments.

The Policy Governance model is designed to allow the Board to delegate with great clarity by completing three steps:

1. Expressing the expectations of the job being delegated.

2. Assigning the expectations with no ambiguity to the General Manager who is to be held accountable for meeting them.

3. Checking that expectations were met.

The Bylaws of the Oxford Hills Food & Nutrition Exchange, Inc. are like the Constitution of a country: relatively set-in-stone, requiring Ownership approval to amend. The Policy Governance (“PG”) Register is a tool used by the Board to govern the organization. Like laws, these policies can be changed by the Board. Changes should be minimized and carefully discussed and considered before they are made. PG serves and guides the relationship between the Board and the General Manager, and the Management Policies serve as the Job Description of the General Manager by which her or his performance is evaluated by the Board.

We have four general categories of policies that express our expectations for ends to be achieved and the acceptable means by which to achieve them. The diagram shows how the policies work together.

A – Ends

Ends policies broadly state the desired organizational outcomes. They describe the ongoing priorities of what should be achieved and for whom.  The General Manager is responsible for reporting on compliance with these policies once a year.

B – Board Process (BP)

The ‘BP’ policies describe how the Board is organized and its process and products. The Board evaluates its compliance with these policies throughout the year.

C – Board-General Manager Linkage (B-GM)

These Board-GM policies describe how the Board delegates to our sole employee, the GM.  The board evaluates its compliance with these policies throughout the year.

D – Management Policies (MP)

The Management Policies delineate job expectations and acceptable constraints within which the GM can act. The GM develops a written report for the Board on each of these policies on a regular basis throughout the year, and the Board evaluates whether the interpretation was reasonable, and makes conclusions about whether the GM is in compliance. If it is determined that we are not in compliance with our policies, the Board discusses the reasons for this result and establishes parameters and expectations for achieving compliance within a set time frame.  The Board may require additional monitoring of the policy (on a more frequent basis) or even conclude that the policy needs to be revised. (These were/are known as Executive Limitations.)

Creating and Monitoring Policies

Our approach to crafting policies was to begin with broad statements regarding allowable and prohibited behavior, which we borrowed from Hanover Co-op and worked extensively on with CDS. We then made increasingly specific policies. For example, a policy that prohibits the GM from violating the law provides a concise statement of expectation and is a lot easier than trying to think of and then write down a list of all the illegal actions which could be undertaken. A more specific policy might require that a certain level of insurance be carried to protect Fare Share’s property. We limit the level of detail in our written policies to that which is required for the Board to accept any reasonable interpretation of those policies. This approach allows for the maximum flexibility and creativity within clearly established boundaries and provides a system for delegation and accountability. (It helps also to have a manageable amount of policies – it would be much more difficult to monitor 200 pages of detailed policies. Furthermore, it keeps us out of the micro-managing realm so that we can focus on the big picture questions like ‘how can Fare Share promote the transformation of society?’)

The advantages of using the Policy Governance model are:

• It enables the Board to focus on the future, and provide high-level organizational leadership rather than focusing on day-to-day operational issues.
• By deciding on the larger issues about ends and means the Board can maintain meaningful control of the organization while allowing the General Manager and Committees to create solutions and decide on smaller issues.
• The Board can delegate genuine authority to others without failing in its own accountability—the parameters of delegated authority are clearly established by the Board, allowing for decisive management by the General Manager.
• Regular assessment of compliance with policy provides a systematic method for evaluating organizational performance because the Board knows what to look for.
• The Board and its subordinates (e.g. its committees, the GM) know what is required of them because expectations are clearly articulated.  Since the design of jobs has already been decided, the Board can distinguish the proper course of action when confronted by questions without having to spend time defining the nature of governance itself.

The Board of Directors exists for the sole purpose of ensuring, on behalf of our Owners, that the organization performs as it should. We must constantly evaluate our purpose—what transformation we want to occur for people and even the world outside of our organization—and our Ends—the accomplishments, which justify our existence. This brings us to the most important question: what difference does having Fare Share in the world make to you?

The Policy Governance methodology was developed by John Carver as a means to structure Board process to allow for Board accountability on a meaningful level and empower the Board to lead their organizations at the highest level.

—Thank you to Wheatville Food Co-op in Austin, Texas for this explanation on PG that we have adapted for our needs here.