Split those roles
Separating the roles of chairman and chief executive is a key condition to the successful operation of an organisation according to the tenets of Policy Governance®. This principle was discussed in a recent article by The Economist columnist Shumpeter asking ‘is there no limit to the audacity of Scandanavians?’ He cites the award of a ‘premature’ Nobel peace prize to Obama and tells us of a new culprit – NBIM (Norges Bank Investment Management)- interfering in American affairs.
Pension Fund Persuader
NBIM is a company running a monster Norwegian state pension fund of $400billion which is now trying to persuade 4 US companies to separate the jobs of chief executive and chairman. It has already persuaded Sara Lee to take that route. In the US 53% of Standard and Poor’s top 1500 companies combine the two jobs – 95% of UK companies in the FTSE 3.0 list split them. It seems that we in the UK heard Sir Adrian Cadbury back in 1992 when he urged companies ‘comply or explain’. But while the figures look good, the practice may be less so.
From Principles to Implementation – Health, Education and Voluntary Sector look to Policy Governance®
At a series of workshops run in the UK during the summer and autumn of this year, a number of public sector organisations are taking a good look at the principles of Policy Governance® and considering implementation in their own organisations. The workshops, run by Caroline Oliver of Good to Govern and the Chairman of the UK Policy Governance Association, are attracting chairmen and senior executives from the health sector, from further education and from the voluntary organisations who are interested in sharpening up their governance practices.
The Struggle for Separation
Many of these organisations are struggling to see the unique role of the Chairman and Board and want to avoid that well known situation where the Board usurp the role of the Executives and the Executives second guess the Board. Policy Governance separates the two roles and maintains that the Chairman and the Board are “owners one step down” and not “management one step up”. This thinking frees the Board to concentrate on the “ends” or goals of the organisation and to allow the CEO and executive team to work out the “means”.
Note for Students of Governance
Policy Governance® is the brain child of John Carver and is not only a governance theory but a fully worked out practical model devised by John Carver and his wife Miriam and implemented widely in the States and North America.