There are several options, and it
depends on the Limitation that has been exceeded. There are some
Limitation Policies which when exceeded simply mean the Executive is
removed. These tend to be ethical types of Limitations such as fraud
and misrepresentation. The first question that the board has to ask itself
is whether the condition or action can be corrected. If it can not be
corrected, then the board should remove the Executive.
The second type of violation of a
Limitation Policy, should be governed by the board's policies by the board's
policies on corrective actions.
Unfortunately, Policy Governance® has little to say about violations of
Limitation Policies, and therefore most Policy Governance®
boards have given little direction to "corrective actions." Most of
the literature on Policy Governance® acts as if Limitation Policy violations
The first thing the board should do is
strive to not assume responsibility for the corrective action, yet assure
that the executive is responsible and accountable. This is done through effective monitoring of the Limitations and assuring
that the executive is responsible for the corrective actions.
Effective monitoring suggestions can be found in the
Mastering Monitoring Board
Work Guidebook. The real question is what is expected for corrective
When Limitations are exceeded, the first
thing the executive should do is report the violation to the Board. If
it is severe enough, the board should expect an immediate report rather than
waiting until the next board meeting. However, this too is left to a
reasonable interpretation of the board's policies. If the board has
not been clear enough about what requires an immediate report, then they are
left to what will be interpreted from their policies.
The second thing that the executive
should provide to the board is the proposed actions needed to correct the
Limitation that has been exceeded. In addition to the actions needed,
a timeframe should be provided that identifies when performance or
conditions will be within the Limitations. All of this will have to be
specified within the Board - Executive Policies or there is no real
Boards have the option of accepting or
rejecting the corrective actions and timeline. Boards may wish to
draft policies that identify acceptable timelines for certain Limitations or
simply leave the decision of acceptability as each violation is addressed.
However, boards should avoid identifying the specific actions that need to
be taken or they will reduce the accountability of the executive.
The following on-line
articles published in the Nashville City Paper may be useful for their
approach to exceeding limitations:
An example of a
limitation policy that directs executive corrective actions can be found in
the Sample Board Policy Manual
at 4.1.6. The Sample Board Policy Manual can be downloaded in a WinZip
file as a Microsoft Word document.
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