Ted Hull Consulting FYI

The Challenges of the Reasonable Interpretation

May 19th, 2018

If you have any familiarity with Policy Governance®, you will have heard the term any reasonable interpretation. It is the Policy Governance principle that in my experience is the one most often misunderstood. If you are not familiar with this principle, let me briefly explain it. A Policy Governance board will develop a variety of policies including Executive Limitations which set boundaries on or limit the means the CEO can use to accomplish the Ends of the organization. These boundaries or limitations are often general, leaving the CEO with the freedom to use any reasonable interpretation of the policy.

First, let’s talk about what a reasonable interpretation is not. It is not a synonym for the words the board has used. For example, the board may develop an Executive Limitation which prohibits the CEO from having inadequate insurance. A reasonable interpretation of inadequate is not “insufficient.”  Nor is a reasonable interpretation the random and subjective opinion of the CEO. A reasonable interpretation of inadequate insurance is less than $500,000 or that it is adequate because I say so.

A reasonable interpretation of inadequate must be measurable and objectively verifiable (an operational definition). This might be provided by an insurance company or the results of an appraisal, for example.

Periodically my wife and I will fly when taking a vacation. Invariably, when packing the suitcase the subject of whether or not it is too heavy comes up. It might not surprise you that she and I will have differing opinions on whether or not the suitcase is “overweight.” In times past, those debates would revolve around our subjective opinions as to how many changes of clothes needed to be taken. One of us (I won’t say who) would make the case that more is better than less. The other one would claim vociferously that the variety of clothing options has rendered the suitcase overweight. The suitcase isn’t too heavy, because I need all these clothes. This interpretation of “overweight” was countered with I tried to pick it up and I hurt my back.

Using our Policy Governance lingo of a reasonable interpretation, how does “overweight” have an operational definition? One way is to take the luggage to the airport –carried by the partner who does not have the herniated disc – and placed on a stainless steel tray next to the ticket counter. If the number is in excess of 50, the suitcase is overweight. It works every time and on every scale. Overweight isn’t defined by the amount of clothes that are needed or the condition of one’s back. It is clearly objective.

Developing reasonable interpretations is not always as easy or straightforward as dragging out a bathroom scale to weigh a suitcase, but it can invariably be done.

The concept of developing a reasonable interpretation for each policy can be onerous the first time around. It’s somewhat like building the scale. But once you have the scale, the only thing that changes is the amount of clothes in the suitcase.



Ted Hull Consulting FYI


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  • The Challenges of the Reasonable Interpretation
May 19th, 2018
The "reasonable interpretation" concept in Policy Governance is often misunderstood. In this blog we take that concept and make it easily understood. In fact you use the concept much more often than you might fi.....
So Your Board Can Better Serve
204.898.6740

Ted Hull Consulting FYI

The Challenges of the Reasonable Interpretation

May 19th, 2018

If you have any familiarity with Policy Governance®, you will have heard the term any reasonable interpretation. It is the Policy Governance principle that in my experience is the one most often misunderstood. If you are not familiar with this principle, let me briefly explain it. A Policy Governance board will develop a variety of policies including Executive Limitations which set boundaries on or limit the means the CEO can use to accomplish the Ends of the organization. These boundaries or limitations are often general, leaving the CEO with the freedom to use any reasonable interpretation of the policy.

First, let’s talk about what a reasonable interpretation is not. It is not a synonym for the words the board has used. For example, the board may develop an Executive Limitation which prohibits the CEO from having inadequate insurance. A reasonable interpretation of inadequate is not “insufficient.”  Nor is a reasonable interpretation the random and subjective opinion of the CEO. A reasonable interpretation of inadequate insurance is less than $500,000 or that it is adequate because I say so.

A reasonable interpretation of inadequate must be measurable and objectively verifiable (an operational definition). This might be provided by an insurance company or the results of an appraisal, for example.

Periodically my wife and I will fly when taking a vacation. Invariably, when packing the suitcase the subject of whether or not it is too heavy comes up. It might not surprise you that she and I will have differing opinions on whether or not the suitcase is “overweight.” In times past, those debates would revolve around our subjective opinions as to how many changes of clothes needed to be taken. One of us (I won’t say who) would make the case that more is better than less. The other one would claim vociferously that the variety of clothing options has rendered the suitcase overweight. The suitcase isn’t too heavy, because I need all these clothes. This interpretation of “overweight” was countered with I tried to pick it up and I hurt my back.

Using our Policy Governance lingo of a reasonable interpretation, how does “overweight” have an operational definition? One way is to take the luggage to the airport –carried by the partner who does not have the herniated disc – and placed on a stainless steel tray next to the ticket counter. If the number is in excess of 50, the suitcase is overweight. It works every time and on every scale. Overweight isn’t defined by the amount of clothes that are needed or the condition of one’s back. It is clearly objective.

Developing reasonable interpretations is not always as easy or straightforward as dragging out a bathroom scale to weigh a suitcase, but it can invariably be done.

The concept of developing a reasonable interpretation for each policy can be onerous the first time around. It’s somewhat like building the scale. But once you have the scale, the only thing that changes is the amount of clothes in the suitcase.

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  • The Challenges of the Reasonable Interpretation
May 19th, 2018
The "reasonable interpretation" concept in Policy Governance is often misunderstood. In this blog we take that concept and make it easily understood. In fact you use the concept much more often than you might first think. .....

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