We spend a lot of time working with clients on how to handle strategic issues with the board of directors. But policy issues are an important responsibility of the board as well. And policy decisions should be based on knowledge as well. Policy issues should be handled just like strategic issues. The following are some tips.
A background paper should be created answering the four-knowledge based questions. The background paper should be much shorter than that for strategic issues – three or four bullets under each of the four knowledge based questions should be sufficient. The four knowledge-based questions are:
- What do we know about our stakeholders’ needs, wants, and preferences that are relevant to this decision?
- What do we know about the current realities and evolving dynamics of our environment that is relevant to this decision?
- What do we know about the “capacity” and “strategic position” of our organization that is relevant to this decision?
- What are the ethical implications?
Unlike strategic issues, the staff DOES make a recommendation on policy. The recommendation is in the form of a draft policy statement.
If it is review of an existing policy, then a very simple background paper will be appropriate if it’s OK as is. If it’s a change in policy, than the four questions should be used to explain why the change is necessary.
Usually, new or significant change in policy is handled in two steps. Step one is for the Board and staff to engage in dialogue to clarify the objectives of the policy and what its major components should be. Step two is for staff to draft policy language that reflects the results of the step one discussion.
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