Implementing a governance model into your board will give your members a set structure and expectation of the work involved. The varying options can allow CEOs to evaluate different arrangements that work best for their organization. Both the members and the organization will benefit from a consistent system of governance that holds all parties accountable for their roles. The descriptions listed below provide a brief overview of the inner workings of each model and how they can enact growth in your organization. Find out more about which model fits your organization the best and how to implement the best strategies within these separate models.
1. Advisory Model
Due to the structure of this model, the members are typically not gaining from being on the board. Their main function is to provide the CEO with advice and expertise in a specific field of knowledge. Various backgrounds are beneficial to showcase the most diverse and vetted information possible. Advisory models act in the service of the CEO which may leave the members feeling rather unattached to the company that they serve. However, their reputations and connections should be used as an asset in the advancement of the company. This model is structured as a guidance-based relationship where the members of the board impart their knowledge and counsel to the CEO of the organization in the hopes of leading the company to the most profitable decisions.
2. Management Team Mode
Members of a management team model board are grouped into specific categories that are tasked with researching and delivering information about their area of focus. Similar to the advisory model, the members are encouraged to become an expert in a particular realm of board activities such as marketing, HR, fundraising, etc. This model encourages members to work together in small teams and then present their findings to the group in the attempt to search for the most ideal solution to a problem. Members of this model may also be assigned the role of liaison between the different teams in order to streamline the varying facets of a problem. This model thrives in smaller to medium-sized companies that allow for a more interactive and hands-on approach to governance.
3. Cooperative Model
The focus of this board governance is cohesive decision-making among equally ranking members. This model often does not exist in a larger organization because their operations typically require the stability of a ranked hierarchy to maintain control. Cooperative governance focuses on the importance of voting. Respect among members is a critical aspect because no one member can claim power over another. This type of governance favors a democratic style of operation with very little overarching control of a single member.
4. Policy Board Model
This structure of board governance separates the CEO from the board as distinct entities. The board is stationed behind the CEO in the decision-making roles and acts as an aid in the function of the organization. The policy board model is also referred to as the Carver Board Governance Model and its goal is to monitor the overall success of the company instead of overseeing the daily functions. This type of board promotes freedom of decision-making for its CEO but attempts to set boundaries to avoid unforeseen miscommunications.
5. Patron Governance Model
This type of board governance elicits very little power for its members but instead serves as a branch into the community of where the company is located. Members of the Patron Governance model are selected to serve as an advertisement to a community to demonstrate its values and beliefs. Because of this rather ornate position, they are not tasked with research or decision-making duties. A company will most likely have another board co-exist alongside a patron governance model board.
Importance of Governance
Board governance is a crucial aspect of the proper running of any board of directors. Their structure and maintenance will likely predict the success of the board. Its implementation will keep seasoned members accountable while also teaching incoming members about the expectations set forth by the company. The individual worth of each governance model is based upon its effectiveness within the organization. The power dynamics can vary greatly among the differing structures, yet their proper execution can provide an invaluable asset to any board.