Making Policy

Policy Governance: Steering Without Rowing

Policy governance refers to the tools and processes the board uses to set the strategic direction of the organization. This kind of work is often referred to in the literature on board governance as “steering”, in contrast to the “rowing” that the management and professional staff undertake to accomplish the daily work of the organization. We depict this Policy Governance Model in Exhibit 1. It is a recursive process where the board and management team are constantly engaged in conversations and exchanges of information that help both the board and the management team assist one another in performing their respective roles.
Exhibit 1 assumes the starting point for initiating these conversations can occur at any point along the policy development/policy implementation continuum. It also assumes that conversations to improve policy governance is the mutual responsibility of both the board and the management team.
On each side of the Policy Governance Model in Exhibit 1 we list a combination of tools and practices that are commonly used to help both the board and management team carry out their policy governance roles. In Exhibit 2 we provide a summary matrix of these tools, with hotlinks to further explanations and examples.

Exhibit 1:

Policy Governance Framework : A Recursive Process Between the Board and Management Team

The illustration below is intended to capture the cooperative relationship between the board and the senior management team in developing and implementing policy initiatives. While the board takes the lead on policy development and the management team takes the lead on implementation, the relationship requires on-going mutual support and assistance from one another. This partnership has an inward facing focus on the organization and an outward-facing focus on the larger community represented by the circles at the base of the framework.

Co-Production Governance Model — Governance: A Recursive and Co-production Process with Partners diagram

Exhibit 2:

Policy Governance Tools: A Summary

Documents	Purpose	Advantages
Informal Processes for Setting Board Priorities	What are the board’s policy priorities? How is the board spending its time?	Enables elected officials to align their time and agenda with their policy governance goals.
Strategic Planning/ Community Envisioning/Goal Setting SWOT Analysis	What are the community’s priorities? Where are their opportunities to leverage resources through collaboration? What are the strengths, weaknesses, opportunities and threats for the organization and larger community? What are the implications of demographic changes? What is the long-term financial health of the jurisdiction, including: Operating budget? Capital budget?	Provides elected officials and administrators with information they can use to harness community support & align the organization with the strategic priorities of the community. Provides both administrative and elected officials with an understanding of contextual forces that create both limitations and opportunities.
Organizational Capacity Assessment	Where does the organization need greater capacity? What are the costs and time needed to create this capacity? Are there opportunities to create capacity without increasing costs?	Provides elected officials with an understanding of how much and how fast they can push the organization on their policy goals.
Annual Board Goal Setting	What goals do we want to accomplish this year? What is the board and staff work-plans for achieving these goals? What benchmarks will we use to assess progress and success?	Provides the administrative staff and community with priorities for the year.
Budgeting as a Policy Tool	Budgeting is a “Best Guess” Budgeting is a political process requiring reconciling competing goals Operating v. Capital Budget	Allocates resources to achieve board policy goals,
Capital Budgeting as a Policy Tool	What assets should we replace, when and at what projected costs? How will we finance replacement in collaboration with private and other public sector partners?	Provides a long-term time-line and financial plan for the replacement of the jurisdiction’s physical infrastructure
Revenue as a Policy Tool	What are our revenue sources and future projections? What revenue strategies can we use to expand our resource base while ensuring equity and fairness? How can we incentivize economic growth?	Provides the financial means for meeting legal obligations and supporting programs that have the highest community priority.
Contracting Out Services	What contracts does the organization have for various kinds of services? What are the accountability provisions written into these contracts? What is the review process for renewing contracts?	Provides the board with a summary of the amount and kinds of contracts it is responsible for executing. Enables the board to assess the role of contracting-out to support its policy goals.
Intergovernmental Agreements and MOU’s	What are the number and kind of intergovernmental agreements the organization has with other entities? What is the process for review and renewal of these agreements?	Helps the board assess opportunities for improving service delivery and lowering costs through collaborative agreements.
Formal Policy–Making	What is our process for making policy, including information gathering, analysis, developing community support, public hearings, testimony, etc.?	Norms the expectations of staff, board members and citizens/stakeholders who have an interest in the outcome.

Tools for Policy Governance

There are a variety of well-tested tools that boards can use to carry out their policy governance role. Most of these tools rely on the expertise of staff and consultants for helping boards choose the right combination of tools and to put these tools into practice. With that in mind, our intent in the summary below is to provide board members with a general knowledge of what tools are available and what they are good for, not to cultivate expertise in their use.

Board Situational Analysis: Situational analysis assesses how the governing board is currently spending its time. The analysis seeks to answer the following questions: What are we currently doing? How much time are we spending on different activities? Why? Are we satisfied with the allocation of our individual and collective time? This inventory is used to facilitate a discussion and the creation of a process for refocusing the board’s role in taking responsibility for policy governance.

Environmental Scan/SWOT Analysis: SWOT is shorthand for an assessment of the strengths, weaknesses, opportunities and threats (SWOT) that a given organization is facing. This four-part analysis has proven to be an effective tool in helping boards gather the information they need to address a wide variety of issues that emanate from the single question that is the focus of SWOT: Are we doing the right thing? Periodically, boards need to take time out to consider this question from a 360-degree perspective. In doing so, boards acquire increased confidence in deciding how to re-position the organization strategically to provide high qualities of services for the next generation of citizens, not simply those currently being served.

Stakeholder Analysis: Stakeholder analysis, as the name implies, identifies the kinds and types of community interests that are invested in the work of the board on a given issue. These stakeholders are mapped and organized on the basis of a combination of their power and the breadth of their interests. The process requires the technical support of knowledgeable staff or outside consultants. Boards can use this information to develop strategic plans that are informed by community interests and capacity to support different kinds of board initiatives.

Community Surveys: Community surveys embrace a wide range of information-gathering initiatives – citizen priorities, satisfaction with services, demographic changes, targeted views on specific issues and the U.S. Census Bureau’s data collection on community characteristics (https://www.census.gov/programs-surveys/acs). This kind of information plays a critical role in informing the board’s policy governance role. To make sure the survey is deemed objective by the community, the board may want to get an outside consultant or organization to design and execute the survey. Surveys conducted by staff are rarely considered objective, professional, and trustworthy.

Community Collaboration and Engagement: Community collaboration and engagement is an increasingly important strategy boards use to gain support in carrying out their policy governance responsibilities These strategies include a combination of representative community task forces, public listening sessions, stake-holder advisory subgroups, charettes, and other community-centered information gathering and dialogical processes (Community Engagement Guide).These tools enable boards to expand their policy governance role beyond the organization to the larger community the organization serves. These processes differ from stakeholder analysis because the perspective for determining success is intergenerational, driven by a vision that is never quite complete but always in need being fueled by those who will follow in your footsteps (Baker City Comeback, Washington County Vision Action Network, Mt Hood Stewardship Project).

Organizational Capacity Assessment: Boards often fail to give sufficient attention to the capacity of the organization to carry out its priorities and mandated state and federal legal requirements. One way for a board to incorporate organizational capacity into its policy governance role is to routinely work with the management team to acquire up-to-date information that can guide the board’s priority-setting responsibilities. In the absence of such information there is the danger that the board will reach beyond what is achievable, resulting in mutual frustration by the board and the senior management team. When this happens, the manager is often blamed, resulting in misplaced expenses and energy being expended on recruiting a replacement.

_{¹¹ The literature generally uses situational analysis more broadly to include external environmental assessments, such as SWOT and “drivers of change” analyses. We treat these separately because boards often are spending too much time on activities that are not central to their policy governance role.}

Key Governance Documents

Processes and Tools for Policy Governance

Community Engagement Guide

Framework for Evaluating Public Policy

Appendix A PDF