Purpose + Principles = Policies and Procedures

Not-for-profit directors generally understand that part of their governance role involves setting policies to guide the actions of office bearers, staff, and volunteers. However, not all of them have understood the importance of capturing the principles underpinning the policy in question.

For the purposes of this article, the policies we are considering are ‘governance policies‘ rather than ‘public policy position statements’, or ‘administrative policies‘. Governance policies relate to such matters as Delegations, Director Conduct, Conflict of Interest, Finance, and Risk (amongst many others).

The chart above reflects a recognition that policies guide actions that are intended to achieve your organisational purpose. This is the rationale which all stakeholders acknowledge, and which is sometimes expressed: “if xyz organisation didn’t exist, we’d have to invent it”.

Many boards adopt policies as risk management instruments, with boundaries or limits set on certain types of action. Often these are expressed as explicit procedures or protocols which must be followed by office bearers, staff, volunteers or members. Sometimes policies are limited to specifying procedural matters without reference to the underlying principles that should inform decisions and actions. To that extent, they are not really policy documents at all.

The Institute of Community Directors (ICD) offers a valuable Policy Bank, with many template policies that can be adapted to the needs of not-for-profit organisations (subject to their terms and conditions). ICD distinguishes between policy and procedures documents in the chart below.


So what do we mean when we refer to principles in this context?

A fundamental truth or proposition that serves as the foundation for a system of belief or behaviour or for a chain of reasoning“.

Oxford Living Dictionary

Procedures and protocols are fine for all the predictable circumstances which constitute ‘business as usual’, however, these documents often lack guidance on how to respond to unusual or unforeseen circumstances. This is where principles are essential, as they guide those who must decide how to respond and can, therefore, be seen as ‘decision support tools‘.

In the absence of protocols addressing a given set of circumstances, the ‘discretion’ being exercised by your team members needs to reflect a sound understanding of the foundations for desired response.

If your governance policies don’t include the principles underpinning them, the opportunity is there to enhance them, and so better support your team to achieve your purpose in ways that are consistent with your board’s expectations.

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