Policy or Working Board?

by Debi Peverill | Dec. 27, 2012

What does this mean? A working board is one that in addition to its board duties, also takes a hands on role. A policy board is not hands on.

In the highest evolution of a non-profit organization, the board sets the strategic direction of the organization, develops the policies and then directs management and staff to implement these policies. The board watches over the organization. In fact this is where the term "oversight" comes from. This is the ideal of board governance. In this case you have a clear division between the role of the board and the role of management and staff. This is a policy board. This board does not perform any management functions, it does not volunteer to run any events that are held by the organization. A member of a policy board could serve on a committee.

If the organization is too small to have staff, it is harder to draw a distinction between making policy and implementing policy. But this distinction must still be made. The organization still must have board meetings where the strategic direction is set out and the policies made. Even with a small group you can have committee meetings where the decisions are made about how the volunteers are actually going to implement the boards decisions. You might feel a little ridiculous holding a board meeting, dealing with the board business and then adjourning the meeting, to be followed by committee meetings. However this is really good practice for when you have staff.

If an organization has no staff, then volunteers will be performing any staff function. It is possible that these volunteers are also board members. In some ways this is simpler, because the board does not have staff to supervise. However they will still need to have board meetings. No matter how many people are involved the organization has to follow procedures.

Why would we be trying to draw a distinction between different types of boards anyway? A board of directors is responsible for the activities of the organization, no matter what they call themselves. Liability cannot be changed with semantics. A working board is just as liable when things go wrong as a policy board. In Nova Scotia the Volunteer Protection Act applies to anyone who is volunteering their services, whether they are a board member or not.

The distinction between a working board and a policy board does not change any of the duties or obligations of the board of directors.

About Debi Peverill

Debi J. Peverill CA Debi is a Chartered Accountant with more than 30 years experience. She is the author of 14 books on financial management and governance. More information about governance is available on her website. http://www.BasicBoardGovernance.ca Everything Canadian Directors need to know to stay out of trouble


About Chia-Li Chien

Chia-Li Chien

Chia-Li Chien, CFP®, CRPC, PMP; Chia-Li “like JOLLY,” Succession Strategist of Value Growth Institute, dedicated to helping private business owners increase their company equity value. She is the award-winning author of the books Show Me The Money and Work toward Reward and a faculty of the American Management Association. Her blog and newsletter was named a Top Small Business Resource by the New York Times You’re the Boss blog. Contact her at jolly@chialichien.com or (704) 268-9378 .

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