The gold standard in policies
Monday, October 05, 2020
Policies are the wisdom of prior boards, adopted as motions and recorded in the minutes, to guide actions and decisions of the current and future boards.
They frequently interpret broad sections of the bylaws, which purposely lack detail. For example, the bylaws may require a periodic financial audit. A policy will specify frequency, type of audit, and the hiring of a CPA.
It is easier to adopt, amend or repeal a policy than the bylaws, which usually require as approval process by the membership. Associations rely on 25 to 50 policies.
Most commonly they address investments, confidentiality, antitrust avoidance, and authority to speak for the association. Other policies result from questions on IRS Form 990, including public records, record retention, conflicts of interest, financial audits, and whistleblowers.
There are two policies I have seen that add significant value for associations and chambers. Both clarify roles and responsibilities.
Management and Governance Model: The purpose of this policy is to ensure the board governs without efforts to manage staff.
The association has adopted a model of management and governance to ensure the volunteer leadership and CEO/executive directors effectively advance association efforts. The board of directors will focus on governance in accordance with the governing documents. The elected officers and board will focus efforts on advancing the mission and goals, serving the membership, protecting, and building resources, while being visionary and strategic.
The CEO is responsible for management, including staffing, office, protection of assets and other responsibilities associated with a corporate CEO. While the board governs, the CEO manages, working together to serve members. With exception of the chief elected officer, volunteer leaders do not direct staff.
Distinctions in Policies and Procedures: The purpose of this policy is to ensure the board understands the difference between policies and procedures.
The association distinguishes between board policies and management procedures. Policies are established to guide board decision-making. Procedures guide the staff’s administration of the association.
While personnel policies may be referenced, they too are distinct. The board does not have direct involvement with personnel matters. Those policies are overseen by the executive director and association attorney.
Policy and Procedures Manuals
Confusion continues to exist between the terms and purpose of policies and procedures. Some associations distribute a manual mistakenly titled “Policies and Procedures.”
“Making a clear distinction between policy and procedures manuals indicates an effective organization with an understanding that boards govern, and staff team manage,” offers Bill Pawlucy, CAE and president of Association Options.
A strategic board has little interest in staff procedures, preferring to focus on policies, positions, and outcomes.
Policies often result in administrative procedures. When a policy is adopted at a board meeting, in turn staff will determine implementation steps.
For example, the board might state a savings reserve should be maintained equaling 50 percent of the annual budget. The staff will work to reach and maintain the threshold.
Policies are transcribed from the meeting minutes into a compendium of all policies. They are distributed in the board’s leadership notebook or accessible online.
If no policy manual exists, review the last few years of minutes to identify motions that translate into policies. Review IRS Form 990 to determine if the policy questions are answered affirmatively. And rely on a CPA and attorney to recommend policies. A free policy toolkit is available.
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