Synopsis: Principles Based Governance is an elegantly simple model of board governance that is challenging to implement. People often confuse the difficulty of implementation with the workability of the model. At the core of any successful governing model is the level of transparency and honesty leaders can accomplish and maintain. Fear, secrets and silos ultimately lead to organizational chaos, regardless of your governing model.
Building Trust, Strengthening Governance: Why Transparency Matters
Principles Based Governance is a board governance model based on John Carver’s 10 principles and crafted specifically for Lutheran congregations and organizations. The simplicity of the model cannot be overstated. There are 10 principles that detail the roles and responsibilities of the owners (legal and moral), the governing board and the operational head of your organization. These 10 principles, rightly understood and properly applied, bring clarity, purpose and harmony to your organization whether a congregation or an Recognized Service Organization (RSO).
While elegant and simple, the Principles Based Governance model requires great effort to implement and fully embed into your organization. It is also wholly dependent on the relationship between the board and the operational leader (Executive Director, Principal, Pastor). If there is any suspicion that one or the other party is keeping secrets, working at cross purposes or undermining the credibility of the other, the model is doomed. There are other keys to successfully implementing and maintaining Principles Based Governance. For this article, we’re only focusing on trust and transparency.
The history of board and operational leader interaction includes many stories of adversarial relationships. In other words, there are certain models that set the board up as the guardian of owner interests and assumes the executive is working to subvert or disregard those interests. Principles Based Governance operates under the assumption all parties are committed to the success of the organization and pulling in the same direction. The board remains informed of the interests of the owners and the executive is committed to accomplishing the purpose of the organization as detailed in ends policies while not violating executive constraints policies.
This means that when an executive finds himself out of compliance (has stepped out of bounds by violating a constraint), he reports that immediately to the board along with his remedy to come back into compliance. The board receives this report graciously and affirms the remedy or requests a different remedy if it feels the one offered is too aggressive or not aggressive enough. Even when fully compliant, the Principles Based model counts on the executive to point out to the board when it is getting involved in operational detail and respectfully ask it to stop. Likewise, the board honors its commitment to only speak in writing and doesn’t allow members to interfere with operational matters.
One important tool for trust and transparency is including an evaluation check-in at the conclusion of each board meeting. This is accomplished by simply asking a couple of final questions before adjourning like, “How did we do in this meeting? Did we stick to the agenda? Did we honor our model?” Inviting all board members to assess how you are doing as a board in governing the way you intend keeps everyone refreshed on the model.
Lutheran Church Extension Fund (LCEF) is your source for Principles Based Governance guidance. We’ve helped organizations of various types and sizes think about their governance model. If you would like to have a conversation with a governance professional, contact Tim Kurth today at Tim.Kurth@lcef.org.