Move to Governance -- what gets left behind?

The other day I had a telephone conference with a client. The purpose was to give an overview of governance to put all the directors on the same knowledge of the subject. There was consensus that a move to a governance policy was right for them. There was difficulty, however, in figuring out how to go about it.

For a while, the Board and top management had been cleansing their existing policies of operational, detailed policies and procedural statements. This was a good thought and a good start. However, in doing it, they could be losing important statements.

The current proposal was for the board to use a model governance manual, customize it for their culture, and adopt it. In adopting that manual that Board would deregulate or delegate all the existing bodies of Board polices to management.

One issue raised by a director had to do with Personnel Policies. A director expressed the fear that statements in the present personnel policies would no longer protect the organization from legal entanglements. It helped to realize that adopting the new Governance policies did not eradicate the old policies—they would still be in place and belong to management. It is unreasonable to assume that management would make radical and dangerous changes to the policies now belonging to them. Further, the new governance policy would include ends policies for management's guidance, and help the board hold management accountable – "management will maintain personnel policies in a manner that prevents legal entanglements." In addition, a review of the personnel policies is a legitimate step in management's performance review.