Policies and Procedures
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In this section:
Framework Policies
Governance Policies
Operational Policies
The Policy Manual
Procedures
Policy Governance Summary
Worksheets
Setting policy is an important function of a board. Policies are the guidelines which assist the board in making decisions.
The governing board has the legal authority to make policy, the obligation to see that policies are followed and the responsibility to approve any significant exception to policy. Staff of the organization must follow the established policy of the board.
A policy is a guideline for future action. It should be stated in general terms and imply an intention and direction for taking action. Policies clarify what the board hopes to accomplish over time, and how the board wishes the agency to act.
Many people have difficulty differentiating between a policy and a procedure. Procedures are the specific, detailed steps for carrying out policy.
The following is a simple example of how a procedure develops out of a policy and how it can change within the context of that policy. (Adapted from the hand-out, Guide to Policy Development distributed by the Recreation Development Division of Parks and Recreation, Government of Alberta).
Policy: (2-B-8) In as much as the board believes that the community should be aware of the support services available to victims of family violence, a program of public information shall be actively maintained by the board.
Procedure: The secretary of the board shall submit a monthly information column to the Red River City Herald for the purpose outlined in Policy 2-B-8.
Assume now that the Red River City Herald goes out of business. The policy remains the same because the board still believes in passing along information to the public. The procedure can change to:
Procedure: The secretary will prepare a monthly newsletter from the board for the purposes outlined in Policy 2-B-8. The newsletter is to be distributed with monthly townhall mailings (i.e. utility bills).
Staff interprets policy when developing procedures, and the board monitors these procedures to ensure that the policies are interpreted correctly. The following information discusses policies and procedures in further depth.
1. What are policies?
- The constitution and by-laws are the basic policy documents which govern the agency's operation. The ongoing decisions made by the board also form its policies.
- Policies provide a framework for the board, committees, staff and volunteers to do their work.
- Policies reflect and clarify the agency's purpose.
- Policies provide historical information on past decisions, which are the basis for current and future decision-making.
2. When is a policy needed?
- A policy may be based on a need identified by the board, a committee, staff person or member.
- A policy may be in response to external factors, such as changes in the community or environment.
- An assessment of how the agency is operating may point out the need for a new policy or revision of existing policy.
- A written policy may be required to formalize a current practice which has evolved within the agency.
- Funders may request specific policies be adapted or that policy be developed in a particular area. (Government funders may want to ensure that policies are in line with taxpayers' expectations of government itself - i.e. employment equity, freedom of information, abuse reporting, community involvement.)
3. How are the policies developed?
- A committee or board member may develop written policy recommendations and bring them to the board for approval.
- The board may delegate the preparation of policy recommendations to a committee or staff.
- Staff may develop written policies based on recommendations from the board or a committee.
- Policy recommendations should be put before the board in the form of a motion or resolution and should be approved by the board.
- Approved motions are recorded in the minutes and become part of the agency's policies which govern future decision-making and action.
4. How are policies translated into procedures?
- Approved policies are the basis for how the agency carries out its work. The procedures are the steps taken and the methods used in carrying out the policies.
- Policies and procedures should be recorded in a handbook so that the board, committee members and staff have a reference which is easy to access.
- Policies and procedures should be evaluated regularly and changed if necessary. Policy changes should be made by board motions and procedures amended, if necessary, to reflect different policy.
It is important to re-state the policy making process. The board is responsible for establishing policy. Only the board, in a legally convened meeting, has the authority to approve policy. Board members participate in policy making as a group, representing the entire agency and its community, not a private viewpoint.
While only the board can establish policy, it may receive suggestions for new policy from board members, committees, staff or the membership of the agency. Committees and or staff may be asked to review policy, or prepare recommendations for new policy on the board's behalf. The executive director is often the key person in policy development. As requested by the board, the executive director assesses the agency's operation against new policies and develops the procedure statements for policies being developed by the board or its committees. An executive director's involvement in policy development will depend on the agency's structure.
Under the policy management function, the board ensures that policies exist for each of the following areas.
1. Framework policies that:
- clarify the beliefs and mission of the agency
- include the goals and objectives of the agency
- are normally developed by the board
2. Governance policies that:
- set the principles and rules of the agency
- include constitution, by-laws, organizational structure, roles, responsibilities and functions of all people involved in the agency
- are generally developed by the board (or a board committee) with input from senior staff
3. Operational policies that:
- provide a framework for developing procedures for the management and administration of the agency's programs, personnel and finances. These policies reflect how the agency will manage its day-to-day operations
- provide guidance to the committees and staff
- are generally developed by board committees with input from appropriate staff
Since policy governance is such a critical part of a board member's responsibility, it is valuable to take a further detailed look at specific framework, governance and operational policies.
Framework Policies
Framework policies define what the agency is and why it exists. These policies provide a map of the desired achievements of the agency. Clearly stated, framework policies ensure that the agency's efforts are focused and its best intentions are realized.
The framework section of the policy manual should include belief and mission statements.
The Belief Statement
The first policy in the framework section of the policy manual is the belief statement. In simple terms this statement: identifies the agency's major values; identifies the problem, need or issue that the agency was incorporated to resolve; and states the agency's beliefs about the underlying causes of the problem, need or issues.
The Mission Statement
The second framework policy statement is the mission statement. The mission statement defines the agency's purpose by stating the long-term solution the agency intends to provide to the problem, need or issue that is identified in the belief statement.
In writing the mission statement, a board is providing the focus for the agency's work, and a means to measure progress.
It is also the starting point for the agency's policies and programs. In considering any new policy or program, the board checks it against the mission statement asking, "Is it consistent? Will it help achieve the mission?"
The mission statement is discussed in detail in the Planning and Program Management section.
Governance Policies
Governance policies describe how the board will govern and organize its work. These governance policies should clearly state the roles, responsibilities and functions of the board, its standing committees, and senior staff. The organizational structure and reporting relationships should also be stated here. Additionally, the process that the board must follow for policy making should be laid out in this policy section.
The Constitution and By-laws
The constitution sets out the broad principles of the trust which forms the agency's legal authority. It establishes the name of the agency, its location and its objectives. The key by-laws follow. The details of what is required in the by-laws are discussed in the Constitution and By-laws section.
Role Clarity Statements
Role clarity statements answer the following questions.
- Who are the people involved in the agency?
- What do these people do?
The management style and role clarity statements are closely tied. The former specifies the agency's structure. The latter defines the roles of board members, committees and staff such as the executive director.
The Management Style Statements
This policy answers the following questions.
- How will the board organize and direct the work of the agency?
- What structure and committee system will be used?
The management style statement is such a large issue it may not be finished for many months.
The Policy on Policy Making
This essential policy answers the following question.
- What processes, format and procedures will the board, its committees and staff use in the development, approval and documentation of policies?
The policy on policy making should clarify under what beliefs and conditions policy will be developed. It must also provide precise directions on policy development.
Operational Policies
Operational policies are statements of expectations for the day-to-day operation of the agency. They are the guidelines within which all members of the agency must work.
While framework policies address why the organization exists, and governing policies largely describe who the players are and their relationship to each other, operational policies deal with how the board's functions will be carried out. As such, operational policies will normally be the largest component of the policy manual and will generally include the following:
- general administrative and operational policies
- program policies
- personnel policies
- finance policies
A well thought-out and effective operational policy does the following.
- Explains why the agency exists, and what beliefs and values it is built on. Understanding the intention behind a policy helps everyone involved with its implementation.
- Includes an element of discretion. External or internal conditions may require a flexible response, where a rigid policy may not provide the best answer.
- Includes guidelines for interpreting the policy's intent when the element of discretion is called upon. Such guidelines extend the policy's usefulness and help to keep it responsive to changing conditions.
- Includes a process for its own evaluation. This enables the policy to be kept current and relevant.
- Is written as simply as possible. Policies are meant to be used, and there is no advantage to a policy that takes extensive time to read and understand.
- Should be consistent with policies suggested or regulated by funders.
General Administrative and Operational Policies
These policies deal with the day-to-day operation and administration of the agency. For example, a policy on incident reporting applies to all parts of the agency. It is critical that the board ensures that a policy exists that provides guidelines for the reporting of incidents and accidents in the agency. If such guidelines exist and are followed within the agency, they will help to ensure appropriate intervention in response to an incident and that appropriate measures are instituted to prevent similar occurrences in the future. These guidelines should clearly state the reporting requirements and reporting procedures that best suit the agency.
Program Policies
The operation of any program inevitably raises broad questions such as, "how will programs be planned and implemented" and "who will plan and implement." More detailed questions, specific to each program are also raised: "who will be eligible for the program," "how will applicants be screened," "what fees will be charged" and "where and when will services be provided?"
Operational program policies provide answers to these questions in advance helping to ensure the smooth implementation of the program.
The program section of the policy manual consists of a set of policies that apply to each program that the agency operates (for example, a policy on program planning or a policy on who is eligible for service).
Personnel Policies
Too often boards fail to perform their personnel management responsibilities by failing to develop operational personnel policies. The result is a lack of continuity in the management and administration of the agency's personnel function. Operational personnel policies must be developed in such areas as:
- job classification and evaluation procedures
- salary, benefits and retirement plans
- the use of volunteers
- recruiting, evaluating and dismissing staff
- selecting, training and evaluating board members
- the terms of general membership
- confidentiality and conflict of interest
Personnel management policies provide board members and staff with an understanding of their respective roles and help eliminate the risk of ad hoc inconsistent board/staff decisions.
Financial Policies
Financial governance often causes trouble for boards. Board members, with limited experience in financial management, may find budgets and expenditure controls intimidating. The problems are increased by the growing recognition that boards, as legal trustees for their agency, carry the responsibility for the financial management or mismanagement of the agency.
Financial governance provides continuity for the agency. To fulfill this responsibility, the board:
- establishes the budgeting process and the financial reporting system
- establishes contracting procedures and policy
- plans and reviews budget
- monitors and approves expenditures
- manages the physical and financial assets of the agency
- oversees fund-raising activities
The financial policy section of the policy manual commonly includes policies for the following areas:
Resource development includes the processes and policies that the board adopts to secure the funds needed by the agency. Effective fund-raising is based on a carefully considered plan that sets out where funds may be sought, who will seek them, what fund-raising methods will be used, and how the success of fund-raising will be measured.
Resource development involves preparation of the yearly revenue budget. This is part of the agency's overall budgeting process, and includes all expected sources of funds. The yearly revenue budget allows the board to identify funding shortfalls before they create major problems.
Resource distribution includes the policies and processes that describe how the board will commit and distribute funds to the programs, committees and administration of the agency. The major part of this responsibility is preparing the annual budget and establishing policies to govern expenditures. This includes developing procedures and policy for contracting services.
Resource distribution policies address questions such as: How will the agency decide to spend money on programs? How much money? Which programs?
Resource management includes controlling and reviewing the actual expenditures of funds. It is the board's responsibility to establish policies that direct, implement and evaluate the agency's accounting systems and its annual audit. Through appropriate resource management, the board indicates who has signing authority and under what conditions this authority applies.
Resource management also refers to the management of the agency's physical and financial assets. This takes several forms such as investments, obtaining insurance and facility management.
Overview
The policy management function of the board provides its members and staff with the clear authority and guidance to adequately respond to their respective job requirements. In summary the board, in the policy governance function, is responsible for:
- enacting and updating its own constitution and by-laws, and submitting required reports to the appropriate government(s)
- establishing framework policies defining what the agency is, why it exists, its values and its vision of a desired future
- establishing governance policies which describe how the board will govern and organize its work
- establishing operational policies in the areas of finance, personnel, and program
- establishing policies on how the board will resolve issues which are not covered by any of the above policies
These topics have been discussed to assist board members to focus on their governance responsibilities. There are many sources of in-depth information available on each area of policy governance.
The Policy Manual
When a board policy decision is simply recorded as a motion in the minutes of a meeting, it can sometimes get lost or forgotten when new members, or new staff, are recruited. The development and use of a policy manual can avoid this situation.
Policies should be kept in a policy manual and be easy to locate. The simplest and most practical manual is one which utilizes a standard three-ring binder to store the printed policy statements. Having only one statement per page facilitates expansion and updating of the manual.
Each policy should be assigned a reference or file number, which can be categorized according to the date or order of adoption; a program or facility area, by framework, governance or operational policies; or any other system of distinguishing policy groupings.
Number, letter or colour coding of policies are effective ways to make policies in the manual easy to find.
The policy manual should include a glossary of terms. This can be used to avoid wordy policy statements and to establish a common definition for terms frequently used and otherwise subject to differing interpretation.
Each page of the policy manual should include the following:
1. policy number (reference number)
2. subject of policy
3. date of final approval
4. reference to policy being replaced (if applicable)
5. the policy statement
6. signature indicating approval of the policy
7. approximate date for review of the policy
Use a standard format for the manual and record as much information as is required for future reference.
Procedures
Procedures are developed for the activities and functions that lend themselves to repeated and consistent application of a step by step process. Procedures guide the day-to-day operations. There should be procedures for all activities or functions critical to the effective management of the agency.
Procedures are based on policies and state in detail, what the board or staff must do and how it must be done in order to ensure all actions are consistent with the policy. Procedures often change, since the same end can usually be accomplished through a variety of means.
The process of developing procedures should involve both policy makers (board of directors) and those who must apply the procedures (staff and committee chairs). As with policies, those responsible for developing the procedures must thoughtfully and carefully prepare a procedure outline.
Carefully developed policies provide definite direction to the agency, and detailed procedures assist the board and staff to move in that defined direction. Procedures should be recorded in some form of handbook, and should be available to all who need them for reference and guidance.
Policy Governance Summary
In establishing written policies the board leaves a legacy of its work and progress on which future board members can build. New members and staff are able to read the policy manual and quickly understand the framework, governance and operational policies which guide the agency.
Policies are time-consuming to initially draft and approve, but will save valuable time in the long-term. Well written policies can reduce the time spent by boards and staff repeatedly discussing the same issues.
When policies are properly recorded in a policy manual and communicated to new board members and staff, they provide for continued growth and stability.
Initially, a listing of the major areas of the board's policy governance function may appear overwhelming. In reality, most boards establish written policies in each of these areas over a period of several years.
The depth of the policy needed will vary with the size and complexity of the agency. Most boards rely upon staff management and board committees to assist in certain aspects of the policy management process. Responsibility for different types of policy development by senior staff should be identified in their respective job descriptions.
The policy development process is dynamic and never really ends. There may be a point at which the board feels that sufficient policies exist, but that is also the time at which existing policies should be reviewed, evaluated and updated if necessary. Policy review is an ongoing activity that the board needs to establish as a regular function.
Worksheets
Policy Management Checklist (PDF)
