PSR: Definition and Procedures for Board-LLLI Policy

Definition and Procedures for Board-LLLI Policy

It is an appropriate and primary responsibility of the Board of Directors to set policy. Policies focus on the issues critical to an organization and are a matter of Board concern and decision making. Policies are guides to action and are intended to result in the achievement of an organization’s mission. Policies can be broad or more definitive. Policies set limits and help to settle questions that arise as LLL decides how to conduct business. Policies maintain operational consistency. Policies usually have a long life, and their long-term applicability is considered when policies are framed. The Board will review policies periodically, rather than addressing policy revision in response to crises.

Policies are distinguished from planning activities, objectives and strategies (deployment of resources). Policies differ from operating procedures, rules and regulations. Though all of these offer guidance and specify a course of action, they differ in matter of degree. Operating procedures are commonly a series of steps to be followed. Rules also describe a specific course of action, but allow minimum flexibility. strategies, procedures and rules are rarely a matter of Board consideration.

Policies can be classified as internal or external. Internal policies are those which help members of the organization make administrative or practical decisions in daily functioning and long-range planning. External policies are made public to those outside the organization, showing the principles or recommendations of the organization. External policies may have political implications. Internal policies can be classified into these areas:

  1. Administration (managerial responsibilities, growth, strategic planning)
  2. Personnel (hiring, training, wages, work environment)
  3. Ffinance (budget planning and control, expenditure authorization and check signing, capital assets, audits)
  4. Program (planning, expansion)
  5. Marketing (product/service, pricing)
  6. Facility
  7. Public relations (internal)
  8. Legal (contracts, compliance with regulations)

External policies might include external public relations, policy statements, subject reviews, practice parameters and commentaries in LLL publications, mission and code of ethics statements.

Policy can also be classified in descending progression:

  • Major Policy (Mission, Code of Ethics)
  • Secondary Policy (Service Area, Service, Clients)
  • Functional Policy (General Management, Marketing, Finance)
  • Minor Policies (Advertising, maintenance)
  • Procedures and Standard Operation Plans (Managing Records, Handling Complaints, Travel Reimbursement)
  • Rules (Paycheck Distribution, Use of Office Equipment)

The first four (major, secondary, functional and minor policy) are subject to Board responsibility. Minor policies, procedures, standard operation plans, and rules are subject to staff responsibility. Overlapping responsibility occurs in the area of minor policy between Board and staff responsibilities.

It is appropriate for staff to make policy recommendations. The Executive Director should analyze a perceived policy need and decide if it deals with an issue which should be brought before the Board of Directors, or if it can be appropriately addressed with a procedure or rule set by management. If a matter is to go to the Board for policy consideration, the Executive Director should carry the recommendation to the Board.

The board is in control of policy-setting procedures. Policies will be comprehensive, clear, and included in the Policies and Standing Rules Notebook. Most policy implementation comes under staff responsibility. Generally, the board and staff formulate policies, board sets policies, staff implements policies, and board and staff evaluate the results.

Resource: Duca, Diane. Nonprofit Boards: A Practical Guide to Roles, Responsibilities and Performance. 1986.
(Apr 93)

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