February 2007
On
the Development of Monitoring Reports
I have written previously about the power, even the transformative and enabling power, of good ends monitoring for both the board and the CEO. Policy Governance does not work without monitoring. (Neither does any kind of governance a board may be doing, but the average board is usually unaware of that fact. Receiving reports, even from board committees, is not monitoring in the Policy Governance sense of assuring accountability.) The better the monitoring, the better the governance within the Policy Governance model.
I believe that the development of monitoring reports should be participatory within the organization, especially regarding ends. Monitoring reports are not something done at the last minute as a necessary evil to satisfy a demand of the board. Doing the reasonable interpretations well should result in organizational ownership. Be participatory. For example, using a retreat venue would be one alternative. The ends reasonable interpretations, for example, become key to the strategic planning process. Hence, all strategic planning in a Policy Governance context begins with good, thorough reasonable interpretations of the ends policies, a good candidate for a retreat or a “catch ball” approach to development. By the time the process is completed the entire organization, top to bottom, should have become knowledgeable of the ends and each person's particular role in accomplishing them.
In fact, Peter Block, in his book Stewardship, argues for the enabling and personal growing power, within the organization, of handing the job of accomplishing results or purposes (ends) downward by having each person do, & be responsible for their portion of accomplishing the ends (while avoiding parental prescriptive supervision). He characterizes this as the delegation or assignment of stewardship. I think that is good way to think about it. Each level stewards its portion of the ends. Thus, each level must do its own interpretation (and then the execution) for the portion they are stewarding. This empowerment grows people Block argues.
In doing the data/evidence section, CEOs should think of the data section as providing the data or evidence that "makes the case" - is convincing enough for a reasonable person. If how things are is compliant with your reasonable interpretation, you are happy and can sleep at night. If not, you've got the basis for fixing it. Don't attempt to game your board by biasing the evidence in any way. The board will eventually figure out what you are doing, and trust in management will be seriously damaged. Trust is management's most valuable commodity with its board. It is very difficult to regain.
CEOs should keep in mind that it is (primarily) their monitoring reports that will be used by the board to judge their performance (which is commensurate with organizational performance). Inadequate or poorly done monitoring reports, poor ability to judge performance, as the board will discover. Rich information in the monitoring reports, good information to judge performance (which almost always helps the CEO favorably).
There are several good basic explanatory guides and writings concerning monitoring reports to assure board policy compliance. Of course, my model is always Policy Governance®. We have monitoring report development guidelines for boards available. There is a Carver Guide published on evaluating the CEO. The one I now provide is based on work originally done by Mark Goehring, General Manager of CDS Foods in Canada, as monitoring report development instructions for his staff, which we have elaborated upon. It is very practical, follows good monitoring principles and has work pages that staff can use. (Call or write me for a copy.)
Richard M. Biery, M.D. © 2007
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(Policy Governance is the registered service mark of John Carver; the authoritative website for the Policy Governance model can be found at www.carvergovernance.com.)