Is it true that in Policy Governance the board ignores budgets?
The board does not ignore budgeting in Policy Governance, but gives it very systematic consideration. The purpose of budgeting is to plan receipts and disbursements so that (a) ends are achieved and (b) financial jeopardy is avoided. As to avoiding financial jeopardy, Policy Governance forces a board to decide what in its situation constitutes “jeopardy,” then to prohibit jeopardy as it has carefully defined it. Few non-Policy Governance boards have ever done that, preferring to follow the conventional seat-of-the-pants approval process with its scattered attention to trivia as well as (or instead of) the profound. Rigorous and systematic monitoring throughout the year completes the feedback loop, providing a continual check on whether ongoing budgeting meets board expectations. So while the typical budget approval isn’t necessary (and is even destructive), closer monitoring of carefully decided budget factors more than compensates. The result is greater board control over what it cons
