The Coalition government has made explicit commitments to strengthen departmental boards and foster a more business-like culture. As part of this commitment, the Cabinet Office is to announce the appointment of new lead non-executive directors (NEDs).
The Institute for Government has been looking into Whitehall boards and recommends further steps to make them even more effective.
The government has announced a significant shake up of boards that will see:
- secretaries of state as chairs of their department's board
- altering the composition of boards to include junior ministers
- reducing the number of officials
- creating the new position of lead non-executive director for each board.
Management boards in government departments have existed in one form or another for nearly 20 years. Their evolution has varied significantly by department, as some have embraced them more enthusiastically than others.
The problem with departmental boards
Previous, soft-touch attempts at reform have been largely ineffectual in standardising or empowering departmental boards – not least because the remit and accountability of boards remain muddled.
As a result, Whitehall boards have struggled to add value to departments in providing strategic direction or adequate oversight of performance.
While these reforms should alter governance for the better, the core issue afflicting departmental boards – namely that neither the government nor departments have yet set out a clear role for their boards – remains.
The Institute's recommendations for effective boards
Even with the bold reforms proposed by the government, our research has shown there are six further steps required to make boards work more effectively:
- Departments must address the lack of clarity that plagues too many Whitehall boards – this should start with defining whether the board is advisory or supervisory and establishing what is expected from each position on the board;
- Departments must ensure the Secretary of State is both capable and aptly supported to be an effective Chairman – The role of Chairman is crucial in setting the tone for everything the board does;
- The performance and operating of the board should be made transparent to conform to the Government’s Transparency agenda – reports on the business of the board, its decisions, structure and performance should be made accessible to the public;
- Sound corporate practice in the private sector calls for annual evaluation and regular external evaluation of the board – evaluation is a key driver of improved future performance, and Whitehall boards should make this a priority;
- Boards must be supported by a high-performing SCS level board secretariat – an efficient and effective board secretariat is the sine quo non of a high performing board, and departments should make the position a high-profile one; and
- Lead NEDs should be involved in the performance appraisal of ALL board members, both on the official and political side – This should drive up board performance, encourage corporate behaviour and provide Lead NEDs with a means to drive better performance in the boardroom.
Director of Learning and Development for the Institute for Government, Zoe Gruhn, said:
"There is enormous potential in the Cabinet Office’s proposed reforms for departmental boards. The prospect of a powerful triumvirate of Secretary of State, Permanent Secretary and Lead NED operating at the board with their diversity of knowledge and expertise will be a massive resource for the board.
"However, based on the results of our forthcoming research on boards, and taking into account all aspects of the Cabinet Office’s new boards’ protocol, we see a number of barriers that will need breaking down in the very near future.
"Our six recommendations are a good start, but we also believe a comprehensive induction programme will be key to getting value out of the new Lead NEDs on Whitehall Boards. Above all the new Chairs, Secretaries of State, will need to not only take their new role seriously, but demonstrate the crucial skills required of an effective board Chair."
The Institute's recommendations are based upon over forty interviews with officials and non-executive directors from 10 Whitehall departmental boards reviewing board effectiveness. It will publish its findings early next year.
- Guardian Public: Government business managers appointed
- The IfG Blog: Can the private sector reform whitehall?
- The IfG Blog: Will 'new style' departmental boards kill or cure?