Will ‘new style’ departmental boards kill or cure?
Just over a month ago, non-executive directors (NEDs) from across government â€“ from the smallest arm’s length bodies to Whitehall’s biggest departments â€“ met at theÂ Better Governance, Fewer Resources conference.
Among many high-level speakers, the most awaited was Lord Browne who was recently appointed as the governmentâ€™s lead non-executive director.
The nature of the reforms
Lord Browne Â spoke about the government’s plans for reforming â€“ and empowering â€“ departmental boards and NEDs.Â He stressed boards’ remits will be expanded to:
- provide strategic leadership
- develop and monitorÂ departments’ Â business plans
- scrutinise policy delivery.
Whitehall board structures will also see major changes. Â They will comprise ministers, fewer civil servants, and new lead non-executive directors.
Lord Browne set out the benefits of the soon-to-be-appointed cadre of lead NEDs. He emphasised the sharp eye for performance management â€“ both in terms of organisation and people â€“ these new NEDs will bring to their boardrooms.
The boardroom identity crisis
Institute for Government Senior Fellow Lord Bichard spoke about the barriers to effectiveness facing departmental boards â€“ chief among them, clarity of purpose.
Drawing on the Institute’s report Shaping Up: a Whitehall for the future, Lord Bichard explained board performance was highly variable across government departments â€“Â and so too was the understood role of boards.
Nearly one in five directors general interviewed by the Institute said there was no role at all for their board. Out of this boardroom identity crisis, sprang problems.
With no clear role for the board, NEDs were challenged to make a positive impact, strategy ran the risk of being disjointed and ineffectual, and performance management could be toothless and inconsequential.
The resistance to accountability
But the lack of purpose or remit that afflicts boards in Whitehall, argued Lord Bichard, was a symptom of structural resistance to accountability. “Accountability is such a difficult issue because there are strong mutual vested interests to resist it,” he insisted.
When a policy or project has failed neither politicians nor civil servants want to admit it. Instead, they will circle the wagons and work together to defend or explain away any perceived failures. In a well-functioning private sector board such behaviour would be unthinkable.
Will the reforms overcome poor board performance?
In such an environment, the Government’s new lead NEDs may Â struggle to make their independent voices heard. If accountability is to be more effective it needs to be more evident not just at departmental level, but across all of Government.
Lord Browne’s reforms should create more favourable conditions for accountability to take root in the boardroom, but the challenge is a dual-track one.
With the help of new lead NEDs, boards will need to define their role and remit whilst also building a true sense of accountability.Â But without achieving both, the inertia of poor board performance may prove too much to overcome.
Read our recommendations for better boards in Chapter 2 of Â Shaping Up: a Whitehall for the future