Should the board review and ratify our policies?

Borthwick Chris Jul2019lg

In this help sheet series, Our Community’s resident agony uncle, Chris Borthwick, offers answers to frequently asked questions about issues not-for-profits are facing.

Dear Agony Uncle,

My query is about policies. Over the past several months our organisation has reviewed and redrafted our suite of policies (using many of your online policy documents as a guide) and our CEO has taken them to the board. The board has told the CEO it does not need to review and ratify the policies, with the exception of the governance policies, which relate directly to the board.

Do we need to have our policies reviewed and ratified, and if so who should do this?

Agony Uncle's answer

The Act doesn’t mandate having policies of any kind, though it allows them (as by-laws). My view is that the board should approve (or ratify, or adopt, or whatever) each policy, for several reasons:

  1. Policies should be important influences on how the organisation conducts itself, and the board is charged with getting them right.
  2. Board consideration gives appropriate weight to the policy within the organisation’s culture (if the board doesn’t care enough to read them, why should other people observe them?).
  3. In purely practical terms, if approval is delegated to the CEO then the ambit of the policies is confined to those people that the CEO can legally bind, which doesn’t include the board (or the ordinary members). If board members are to be bound, they’ll have to approve that themselves.
  4. The CEO on their own can make the rules stick only by writing them into the employment contracts (and volunteer agreements). The board, however, can also write them into the constitution and/or the board procedures for approving members and/or the membership form itself. (I note that you say that the board approves governance policies, but the line between those and other policies can be difficult to draw.)
  5. If the board doesn’t look at the policies, it’s unlikely to know what they say, and that would make it difficult for the board to take them into account in its decision-making, which, given they’re the organisation’s official policies, it should.
  6. If there is a complaint about, say, sexual harassment, then (should it ever reach the courts, or the media, or the public) it would not be a good look to say that the issue had never been in front of the board.

I can’t see that reading the policies is an unreasonably heavy impost on board members’ time (we introduced a Knocking on Wood Policy, if fact, just to identify which members hadn’t read their policy briefs). The CEO can be deputed to draw them up, and to update them regularly, and to submit all changes for approval, and the board can pass them on the nod, if it wants to.

The board shouldn’t obsess over the minutiae of policies, in fact. The CEO’s opinions should be given considerable weight, and their drafts should probably be favoured unless there are very good reasons against it – demented comma-hunting bores everybody, and most of the HR policies, for example, are fairly technical.

But policies, as distinct from procedures (see the examples in the ICDA Policy Bank to clarify which is which) are very much the business of the board.

Best wishes,
Agony Uncle.

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