Departmental Boards: Boosting Reform by p4md

DEPARTMENTAL BOARDS: BOOSTING REFORM Discussion paper This discussion paper looks at how departmental boards have developed, their current role, benefits and limitations. We suggest how they could take a stronger role in making sure policy gets turned into sensible execution, in keeping performance on track, and making sure the right people are in key roles. This document is intended to facilitate discussion on this topic and we welcome feedback.

April 2021

THE COMMISSION FOR SMART GOVERNMENT The Commission for Smart Government is an independent initiative to consider how to make public administration more effective. The Commission is a project of GovernUp, which is an independent, non-party research initiative that offers evidenced-based solutions for all political parties to adopt. The 12 workstreams are: Assessment

What have been the standout successes and failures of recent public administrations, and what can we learn from them?

Best Practice

What are the examples of best practice in the UK and around the world from which we can learn?

Talent & Competence

How do we equip civil servants with better skills, recruit and remunerate to attract the best and incentivise success, and share knowledge?

Project Management

How do we ensure government has the right skills and systems in place to commission and manage big projects successfully?

Finance

How do we ensure stronger financial management, strip out cost and drive efficiency?

Structures

How should we improve the current Whitehall structure, with its small yet overlapping centre and siloed departments, to make decision-making more effective and less bureaucratic?

Devolution

To what extent should we devolve more power and decision-making to local bodies, and how can this be achieved while maintaining a proper role for the UK Government?

Accountability

How can we make the system, including ministers and civil servants, as well as agencies, regulators and arms-length bodies, more accountable?

Technology

How can we deploy technology more effectively and rapidly to improve public services?

Data

How can we ensure that decisions are evidence-based and informed by data?

Ministers

How can we make ministers and advisers more effective in their jobs?

Appointments

How can we ensure that the appointments system attracts the best and aligns with the Government’s priorities?

The Commission for Smart Government is powered by GovernUp, an initiative of The Project for Modern Democracy, a company limited by guarantee no. 8472163 and a registered charity in England and Wales no. 1154924. Privacy Notice.

COMMISSIONERS Michael Bichard

Deborah Cadman Camilla Cavendish Suma Chakrabarti

Ian Cheshire Phaedra Chrousos Chris Deverell Jayne-Anne Gadhia Martin Gilbert Verity Harding Nick Herbert Margaret Hodge Husayn Kassai Daniel Korski Paul Marshall John Nash Mark Rowley Gisela Stuart Jacky Wright

Lord Bichard KCB is a crossbench peer in the House of Lords. He was formerly Permanent Secretary at the Department for Education, first Director of the Institute for Government and chair of the National Audit Office. Deborah Cadman OBE is Chief Executive of the West Midlands Combined Authority. Baroness Cavendish of Little Venice is a former Head of the Number 10 Policy Unit. Sir Suma Chakrabarti KCB was until recently the President of the European Bank for Reconstruction and Development. He was formerly Permanent Secretary at the Ministry of Justice and the Department for International Development. Sir Ian Cheshire was the Chairman of Barclays UK plc until 2021. He was formerly the Government Lead Non-Executive Director 2019-2020. Phaedra Chrousos is the Chief Strategy Officer for Libra Group and a former commissioner for the US Technology and Transformation Service. General Sir Chris Deverell KCB MBE is the former Commander of UK Joint Forces Command. Dame Jayne-Anne Gadhia DBE FRSE is a businesswoman and the founder and Executive Chair of the start-up Snoop. Martin Gilbert is the Chairman of Revolut and the co-founder and former CEO of Aberdeen Asset Management. Verity Harding is a Visiting Fellow at the Bennett Institute for Public Policy, Cambridge University, where she is on secondment from her role as Global Head of Policy and Partnerships at DeepMind. Lord Herbert of South Downs CBE PC (Chair) is a former Conservative minister. Rt Hon Dame Margaret Hodge DBE MP is a Labour Member of Parliament, a former minister, and the former Chair of the House of Commons Public Accounts Committee. Husayn Kassai is the co-founder and CEO of Onfido. Daniel Korski CBE is the co-founder and CEO of PUBLIC and a former Deputy Head of the Number 10 Policy Unit. Sir Paul Marshall is Chair and Chief Investment Officer of Marshall Wace LLP and a former Lead Non-Executive Director at the Department for Education. Lord Nash is a businessman and Government Lead Non-Executive Director. He is a former minister. Sir Mark Rowley QPM is a former Assistant Commissioner of the Metropolitan Police. Baroness Stuart of Edgbaston PC is Lead Non-Executive Director at the Cabinet Office and a former Labour MP and minister. Jacky Wright is the Chief Digital Officer for Microsoft US.

Contents Foreword ............................................................................................................................5 Summary ............................................................................................................................6 Departmental boards: the story so far ............................................................................8 Current role, benefits and limitations .............................................................................9 How boards function today ...................................................................................................... 9 Cross-government roles ......................................................................................................... 11 Benefits and limitations .......................................................................................................... 11

Departmental boards: scrap, improve or reform fundamentally? ............................ 14 Scrap or improve?.................................................................................................................... 14 Reform ...................................................................................................................................... 14 Should there be primary legislation giving boards legal duties and powers similar to corporate boards? .................................................................................................................... 15 Could boards be given their own accountability, and, if so, for what? ............................... 15 The policy/strategy and management divide ........................................................................ 17 Ensuring governance meets the needs of individual departments ..................................... 18

Author .............................................................................................................................. 20 References ....................................................................................................................... 20

Foreword I am pleased to have overseen this Commission discussion paper on the boards of government departments. In the corporate world, boards have a vital role in accountability: • •

They are accountable to shareholders for setting and ensuring the execution of an effective business strategy. They hold the CEO and top executives in the business to account.

The boards of government departments could never work exactly like corporate boards. Our constitutional arrangements land legal responsibility and accountability to Parliament firmly with Ministers. They can only therefore, formally, be advisory. But advisory need not mean toothless. Boards could play a strong role in enhancing effectiveness and accountability in departments and playing a part in departments’ more effective external accountability. In this short paper, we take a look at how departmental boards have developed, their current role, benefits and limitations. We suggest how they could take a stronger role in making sure policy gets turned into sensible execution, in keeping performance on track, and making sure the right people are in key roles. We would welcome feedback. Lord Bichard KCB

Summary Boards and non-executives •

•

Departmental boards have developed from (in today’s corporate parlance) excos in the 1990s to the current model, chaired by the Secretary of State, with junior Ministers, top officials and at least four non-executives, mainly with a commercial background. Boards’ legal status and accountability are completely different from corporate boards. Duties, powers, and external accountability, belong to Ministers and the Accounting Officer; Boards are, in effect, advisory groups. Guidance indicates boards should not be involved in policy development, though in practice some contribute informally. The Government lead non-executive provides leadership for non-executives across government. Some work is done by cross-department teams of non-executives.

Benefits and limitations •

•

Non-executives achieve impact, both at departmental level and in cross-government discussions. Independently chaired audit committees work well, and outside formal processes, non-executives contribute their experience and insight, in particular helping to address the tendency of Whitehall discussions to be ‘non-operational.’ With a small number of exceptions, however, the effectiveness of formal board processes is limited, key constraints being the exclusion of non-executives from the formative stages of strategy and policy development, and the motivations and capabilities of Ministers. Both nonexecutives and Ministers can feel frustrated.

Boards: keep and enhance? •

•

Nothing would be gained by scrapping boards and non-executives. Despite their limitations, the involvement of non-executives has stood the test of time and they do useful work, at departmental level and across government. There is no feasible way of giving boards the legal personality and accountability of corporate boards. However, the paper invites views on a number of ways in which their impact could be increased: Giving them formal responsibility for assuring the soundness of departmental plans and project portfolios. Further strengthening and formalising the role of non-executives in appraisals and appointments through the establishment of a Remco.

Setting down the key elements of board effectiveness in a one-page statement and including board performance in assessments of departmental capability. Involving non-executives, alongside civil servants, in discussion with Ministers about policy development on departments’ priority outcomes. How the Secretary of State, lead non-executive, and Permanent Secretary, lead and manage the work of the Board, and the relationship with other governance bodies, should be decided between them and documented. With the Prime Minister’s backing, Ministers should be carefully briefed and prepared for their Board leadership role and assessed on it.

Departmental boards: the story so fari The timeline below shows the main stages in the development of departmental boards since their emergence in the 1990s. 1990s

Departmental boards emerge, chaired by Permanent Secretaries: only some had non-executives (usually public sector background), others were top officials only. No central specification.

2005

First corporate governance Code of Good Practice: all boards to have at least two non-executives; Code mentioned the possibility of Ministers chairing and Special Advisers attending, but in practice Permanent Secretaries continued to chair all boards. Non-executives appointed by Permanent Secretary after consultation with Ministers.

2010

New Ministerial Code requires Secretaries of State to chair; non-executives to be “largely from commercial private sector” and appointed by Ministers; role of Government lead non-executive created, main role to recruit very senior private sector figures.

2011 (further revision 2017)

Revised Code of Good Practice

Current role, benefits and limitations How boards function today The requirement for a board chaired by the Secretary of State is set out in the Ministerial Code. The remit is defined as “performance and delivery, and to provide the strategic leadership of the department.”ii The brief Ministerial Code definition is supported by a 35-page Code of Good Practice, dealing with Parliamentary accountability, the role of the board, board composition, board effectiveness, risk management and arm's length bodies.iii There are three critical differences between departmental boards and corporate boards: •

Legal status: company law defines the role and accountability of corporate boards. In some contexts, for example regulated sectors, boards are the focus of other legal requirements. In contrast, there is no legislative underpinning for departmental boards. Their existence, role, accountability and functioning are defined in guidance by the government of the day. The legal powers and duties of the department are vested in the Secretary of State.

•

Accountability: as the Code of Good Practice makes clear, boards, and the non-executives on them, have no formal powers or accountabilities [our emphasis]: “This code does not change existing responsibilities and accountabilities of ministers and accounting officers to Parliament…it would not be appropriate to import governance arrangements directly from other sectors…Departmental boards are therefore advisory bodies to support and challenge ministers and accounting officers.”iv

•

Policy and strategy: corporate boards set the strategy of the organisation, as well as overseeing how it is turned into practice, and organisational capability. The Code specifically excludes departmental boards from ‘policy’, ie. what would be considered strategy in a corporate context: “The department’s policy is decided by ministers alone on advice from officials.”v “The strategic direction of the department is developed through the submission process between officials and Ministers, boards have no involvement in that.”vi

Subject to these very important distinctions, the Code defines the operating principles of the Board as:

•

“Leadership – articulating a clear vision for the department and giving clarity about how policy activities contribute to achieving this vision, including setting risk appetite and managing risk

•

Effectiveness – bringing a wide range of relevant experience to bear, including through offering rigorous challenge and scrutinising performance

•

Accountability – promoting transparency through clear and fair reporting

•

Sustainability – taking a long-term view about what the department is trying to achieve and what it is doing to get there.”vii

Its role is to advise on five areas: strategic clarity, commercial sense, talented people, ‘results focus’, and management information. ‘Results focus’ is defined as shaping the departmental plan, monitoring and steering performance, and setting the department’s standards and values.viii Under the ‘talented people’ heading, non-executives play a part in performance appraisal. There is only one brief mention of this in the Code.ix However, lead non-executives undertake performance reviews of their Permanent Secretaries, apparently “a key input and this was valued” for the Permanent Secretary. Apart from their own opinions this is mainly by gaining feedback from others and assessing performance against ‘objectives’ according to supporting data. The appraisal is also to look at leadership skills and team and talent development.” x Membership of the Board comprises the Secretary of State (chair), other Ministers, the Permanent Secretary, the finance director, other top officials, and at least four non-executives, the majority from the commercial private sector.xi One of the non-executives is designated as lead non-executive, to provide support for the Secretary of State and leadership to the nonexecutives. The non-executives have the power to recommend the removal of the Permanent Secretary, if they “believe that the permanent secretary is a barrier to effective delivery.” xii Boards should meet at least four times a year. They are required to have, at least, audit and risk, and nominations committees, and may have others.xiii

Cross-government roles Since 2010, there has been a role of Government Lead Non-executive, appointed by the Prime Minister. A member of the Cabinet Office Board, the lead non-executive meets non-executives across government regularly and reports annually to the Public Administration and Constitutional Affairs Committee.xiv Since 2015, the lead non-executive has encouraged the creation of teams of non-executives from different departments to tackle common problems, for example Brexit contingency planning and a cross-departmental international approach.xv

Benefits and limitations The most serious external study to date says that: “overall NEDs have been a great success. Whitehall has a long history of rejecting foreign tissue, but in this case the graft has taken.” xvi The former Cabinet Secretary and Civil Service Chief Executive have praised them: “Our nonexecutives are a quiet powerhouse, lending their energy, enthusiasm and experience to officials and ministers alike, with a clear commitment to helping government work better.”xvii During the Coalition years, an initially sceptical Secretary of State, Vince Cable, came to see the value of his board: “I didn’t get a strong sense at first that this was going to make any difference and I think they’d picked up that I wasn’t really engaged with it. After the first two to three meetings, I took the view that I wanted to be more active and I got in some new people who I felt more comfortable with. So…the Board became a very important and active part of the governance of the Department.”xviii The innovation of boards with non-executive members has endured for over 15 years, and indeed the role of non-executives has been strengthened during that time. This is telling set against the tendency of other government reforms to run into the sand. In most departments, boards meet with the required frequency, and there is good attendance, other than junior Ministers. The Government lead non-executive’s annual reports, external commentary, and our conversations with non-executives and others suggest that non-executives have positive impact, both at departmental level and across government. Independently chaired audit and risk committees are seen as useful.xix Non-executives also add value through their informal involvement in advice and supporting improvement, at least as much as through main board meetings, the limitations of which are explored below. This is not a criticism, as a previous Government lead non-executive said, members of corporate boards often likewise achieve more impact through informal activity than exercising their formal powers.xx Activities of this kind include acting as sounding boards for senior civil servants; working with them on talent management, appraisal (see page 10 above); bringing a different perspective into The Commission for Smart Government is powered by GovernUp, an initiative of The Project for Modern Democracy, a company limited by guarantee no. 8472163 and a registered charity in England and Wales no. 1154924. Privacy Notice.

discussions from those of civil servants and Ministers, not least raising discussions to a strategic level and tackling what a previous Government lead non-executive called ‘the non-operational culture’; and supporting effective working across departments’ networks of arm’s length bodies.xxi The work of cross-government teams, again not part of the formal remit, is useful, and the Government lead non-executive is able to feed the collective views of non-executives to the Cabinet Secretary and Chief Operating Officer.xxii Turning to aspects of boards’ role and performance where the evidence is more mixed, nonexecutives have worked, at departmental level and across government, to improve the quality of departmental plans. There has been some incremental improvement, for example on the quality of performance information. However, as of 2019, plans were “a long way from achieving their intentions of “bringing together inputs, outputs and outcomes” and encouraging stronger prioritisation.”xxiii Non-executives report that they are “generally inhibited by lacking time, opportunity, and ministerial attention to interrogate pan-departmental plans actively and candidly with ministers and top officials.”xxiv Non-executives likewise report working on major projects, but report a feeling they could do more, the issue on major projects being the perceived weakness of the centre of government and its unwillingness to prioritise.xxv As on other aspects of reform, inconsistency between departments is a problem. This reflects both the absence of the legal and regulatory requirements which create clear expectations for corporate boards, and the limited ability of the centre of government to enforce consistency on departments. In 2018-19, three departments did not even hold the minimum four board meetings stipulated in the guidance. The board of one, the Treasury, met only once. xxvi (As a central department, this seems particularly regrettable.) There is also variability in the extent to which boards are genuinely a focal point for effective decision-making in the department, or out of the loop – a point on which Secretaries of State’s attitudes are crucial. At one end of the spectrum, MoD describes its Defence Board as “the main decision-making forum for non-operational matters” – a bold claim when, as described above, it does not hold the formal accountability. It meets monthly, and the lead non-executive’s report describes it as operating “to an equivalent standard to some of the best boards in the private sector.”xxvii A former minister concurs: “The Board was a very good conduit for making sure that important things got done, because everyone in the MoD knew that they could end up having to come in and report back to the Board themselves…So within the Ministry of Defence, the MoD Board was taken very seriously and was a genuine tool for exercising ministerial authority." xxviii This account is corroborated by a former senior military officer.xxix

Boards do not, however seem to be working as happily everywhere. Some Secretaries of State are doubtful about their purpose or find them frustrating.xxx For their part, non-executives are in some cases “strongly critical of the performance of many departmental boards, mainly because of lack of interest from the secretary of state.”xxxi Apparently, “in most cases, departmental board meetings are not an effective forum for substantial conversations with real outcomes about strategic priorities, integration of departmental effort or risk management.”xxxii The two concerns which feature most are: •

The perceived variable quality of Secretaries of State’s chairing skills, both running meetings and, more generally, understanding how a well-managed board could support their leadership of the department. To be fair, it is relatively unusual for politicians to have had past lives in which such skills would have been developed.

•

Being excluded by the limitation of the board’s role to questions of management and execution from making an impact on the organisation’s strategy and initial policy development.xxxiii

Departmental boards: scrap, improve or reform fundamentally? Scrap or improve? The concerns described above are real and serious, but they are not so much saying that boards with non-executives are harmful or add no value at all; rather that they are doing useful work, but, for a variety of reasons, cannot achieve as much impact as might be ideal. Many of the concerns, notably about Ministers’ ways of working, the weakness of the centre, and inadequate consideration of deliverability in the framing of policy and projects, are clearly not the consequence of how boards work at the moment, more constraints which, if addressed, would enable boards to be more effective. (Other Commission work will bring forward proposals on them.) To some extent, the way non-executives achieve more substantive impact in their informal challenge and support for the organisation than through formal board processes mirrors the way the non-executive role has developed in the corporate sector.xxxiv Commentators have suggested improvements which, while not transformative, are clearly sensible and helpful, for example better induction and training, so NEDs have a better understanding of government, Parliament and the handling of public money, and further strengthening liaison between non-executives in different departments.xxxv Each NED could also be designated as formal ‘link’ either for areas of the department’s business, or for corporate themes, such as effective stakeholder relations, according to their expertise. Proposition 1: There is no reason to scrap departmental boards with non-executives: if nothing else, the Government should keep them and implement sensible incremental improvements.

Reform As discussed above, there is no point trying to reform boards fundamentally without addressing other aspects of decision-making, performance and culture in central government. Alongside such reforms, however, should the role and functioning of Boards be radically reconsidered?

An obvious starting point would be to look at the critical differences between corporate and government boards described on pages 9-10 above: legal status, accountability, and the policy/strategy and management divide.

Should there be primary legislation giving boards legal duties and powers similar to corporate boards? Transferring to boards from Secretaries of State the legal personality and powers of departments is clearly a non-starter. Parliament vests these powers in those of its number who are members of the government which is accountable to it. It could not be otherwise. Proposition 2: there is no mileage in giving departmental boards a legal personality and powers comparable to corporate boards.

Could boards be given their own accountability, and, if so, for what? As with legal powers, it is impossible to see how boards could take over the accountability of Ministers to Parliament for the general conduct of departments, or the specific accountability of Accounting Officers for the stewardship of public money. There are, however, three ways that boards, with non-executives playing a key role, could be given more formal powers and accountability: First, they could be given a formal role, for which they would have to account, for assuring the robustness of departmental plans before they are submitted to the Treasury and Cabinet Office. This would build on and formalise their existing roles in relation to departmental plans and risk. Only Secretaries of State and Permanent Secretaries can be accountable externally for plans, once adopted. But non-executives could be given a specific role to provide internal scrutiny of the soundness of plans, to suggest improvements, and to provide a formal report to the Permanent Secretary and Secretary of State on their findings, which would be shared with the Treasury and Cabinet Office and published. It would be open to the Permanent Secretary and Secretary of State whether or not to act on the findings, but, if they did not, they could clearly expect challenge inside government and from departmental committees and the Public Accounts Committee. With common sense on all sides, it is more likely that either the process of assurance and revision would be entirely amicable, or

there would be a process of negotiation around the finalising of the plan and the non-executives’ report, so the latter did not have to be strongly critical. Once plans are in place, boards could also scrutinise in detail the financial stewardship of Directors General and other top leaders on a rolling basis. Second, boards could have a similar formal role in relation to the strategic fit and deliverability of departments’ project portfolios.1 Third, a forthcoming Commission paper on Talent and Competence will recommend a sharper and more objective approach to judging performance, and reformed hiring practices. There is scope for non-executive board members to play a role in both, for senior roles and key board appointments in arm’s length bodies. The current important, role in Permanent Secretaries’ performance (page 10 above) should therefore be formalised and strengthened to match more closely effective corporate sector practice. Each department should have a Remco consisting of non-executives which assesses the performance of all senior civil servants in their department against precise, granular KPIs. Remcos should also have a role in recommending bonuses. There should be a clear, simple, one-page statement of what makes an effective board, giving more clarity than the current 35-page Code. Boards should be properly held to account for these strengthened and defined roles. Board effectiveness should be part of a formal assessment of departments’ capability. (Proposals on this are being made as part of the Commission’s finance workstream.) Proposition 3: Boards should be given formal authority and accountability for assuring the robustness of departmental plans and project portfolios. The role of non-executives in reviewing the performance of Permanent Secretaries and other senior executives and in recruitment should be formalised through the establishment of a Remco. The key elements of board effectiveness should be set down in a one-page statement and board performance should be included in assessments of departmental capability.

The Commission’s discussion paper Why is government failing to deliver projects successfully? sets out proposals on improved portfolio management https://governsmarter.org/government-failing-to-deliver-projects 1

The policy/strategy and management divide One of the most serious criticisms of the current role and functioning of boards is their exclusion from the shaping of the department’s strategy and policy, which is carried out through dialogue between Ministers and officials. A non-executive commented that: “the doctrine that policy is not for the board has frustrated NEDs, wasted a valuable resource, and contributed to poor decision making. Policy formulated without a shrewd appreciation of how to deliver it will be flawed policy.”xxxvi Alongside other aspects of the culture and functioning of government, this leads to the relationship between policy formation and the consideration of delivery being too much of a one-way street. By contrast, it appears that sometimes, informally, non-executives do become productively involved in policy discussion.xxxvii Boards are surely the right place for strategic discussions about how to move policy from concept into execution. Two of the five areas assigned to the board, commercial sense and results focus, will often be central to such discussions. Non-executive involvement could bring significant benefit – experience of managing the relationship between strategy and implementation, as well as an informed and constructively critical set of eyes more generally. In particular, non-executives would be able to support Secretaries of State in deciding whether official advice on deliverability is sound, guarding against the risks both of excessive caution and optimism bias. One option would be to do this through a delivery board which looks at the progress against KPIs of key policies and objectives. Recognising that non-executives already play useful roles beyond formal board process, it would also be helpful for there to be formal acknowledgement that policy development is a proper subject for discussion by the board, in which members should be involved, informally as well as formally. Ministers, must, of course, set the starting position for policy, based on their electoral mandate and accountability for Parliament. But, since officials currently play a large role in developing policy aspirations into more developed policy which is implementable (or not), there seems no reason why non-executives could not play a useful role in that process also. Boards would not have the capacity to become involved in all policy questions. One option would be to focus their input in policy development on the three or four policy outcomes on which departments’ Outcome Delivery Plans will be based.

Proposition 4: Boards, with the participation of non-executives, should be involved in the policy development of departments’ priority outcomes and how those outcomes are translated into action.

Ensuring governance meets the needs of individual departments It is important that there is broad consistency between departments about the role of their boards and what expectations of them should be. However, the exact way they function does not need to be the same. Indeed, departments vary significantly in the scale and complexity of their operations, and effective governance needs to work with the grain of the skills and preferences of the leading personalities. As one former non-executive puts it: “it is important that Secretaries of State chair boards, but, more than that, it is vital they understand and value them.”xxxviii The questions on which Secretaries of State, lead non-executives and Permanent Secretaries should reflect from time to time include: •

Managing the size of the board. In large departments, with several Ministers and Directors General, the board may be too large to be effective for some purposes. Board leadership should reflect on whether there are models of operation which could ensure that key strategic discussions can be had in smaller groups.

•

The relationship with other governance bodies in the department, including the boards of agencies and arm’s length bodies. Board leaderships should consider whether, for example, there should be representation of the main Board on such groups, or vice versa.

•

How Boards should be led and managed. We believe strongly that Secretaries of State should retain the chair role. It would undermine the status and effective working of boards and be constitutionally problematic if it were otherwise. But there are ways in which meetings and the work of the board can be run, which could play in the lead non-executive and Permanent Secretary in different ways. For example, holding the formal role of Chair need not mean always managing the discussion: for example, on occasion, the Secretary of State could invite a non-executive to take the chair, liberating themselves to engage more actively in the discussion.

An objection to fine-tuning at departmental level is potential inconsistency between departments: as noted above, this has been one of the criticisms of current arrangements. On the other hand, what should be consistent between departments is not the exact design of their governance processes, but that they are effective. Effectiveness can only be determined on the basis of the The Commission for Smart Government is powered by GovernUp, an initiative of The Project for Modern Democracy, a company limited by guarantee no. 8472163 and a registered charity in England and Wales no. 1154924. Privacy Notice.

experience, preference and chemistry between the main parties. What is important is that the roles are clear, agreed and documented. The variability described above (page 12-13) in the extent to which Secretaries of State are seen to be providing the right leadership is likely to reflect the lack of experience many have in operating in a corporate environment. There must therefore be a case for ensuring that new secretaries of state are better briefed and prepared, by ensuring that the role of the board is covered strongly in their induction, and they have training – with all of this being emphasised strongly by the Prime Minister personally on appointment. Effectiveness in their board leadership role could also be part of a system of formal assessment. The Commission’s forthcoming paper on Ministers will examine this further, as part of a wider look at Ministers’ skills development and assessment. Proposition 5: Secretaries of State must chair boards. But how the Secretary of State, lead non-executive, and Permanent Secretary, lead and manage the work of the Board, and the relationship with other governance bodies, should be decided between them and documented. With the clear authority of the Prime Minister, Ministers should be carefully briefed and prepared for their Board leadership role, and assessed on it.

Author The author of this Discussion Paper is Martin Wheatley. Martin is a former senior civil servant and local government professional, with experience on social policy, environment and housing including the Treasury, the Social Exclusion Unit, Croydon Council and the Local Government Association. An independent adviser and researcher since 2011, his published work on government reform includes reports on the centre of government and localism for GovernUp, and on government financial and performance management for the Institute for Government.

References i

Based on Hazell, R et al (2018) Critical Friends? The role of non-executives on Whitehall boards, The Constitution Unit. Cabinet Office (2019) The Ministerial Code, p7 para 3. iii HM Treasury and Cabinet Office (2017) Corporate governance in central government departments: code of good practice. iv Ibid, p9. v Ibid, p13. vi Interview with former Accounting Officer and departmental non-executive. vii HM Treasury and Cabinet Office (2017), p9. viii Ibid, p9-10. ix Ibid, p17. x Current and recent non-executives, in correspondence with author. xi HM Treasury and Cabinet Office (2017), p17. xii Ibid, p18. xiii Ibid, p13-14. xiv Ibid, p 18. xv The Government Lead Non-Executive (2019) Annual Report 2018-19, p17. xvi Hazell, R et al (2018), p103. xvii The Government Lead Non-Executive (2019), p10. xviii Ministers Reflect: Vince Cable, Institute for Government, 7 July 2015 https://www.instituteforgovernment.org.uk/ministers-reflect/person/vince-cable/ xix Hazell, R et al (2018), p 8 and p 69. xx Ibid, p 51. xxi Ibid, p 54-55, p 51; current non-executive in correspondence with author. xxii The Government Lead Non-Executive (2019), p 5-6. xxiii Wheatley, M et al (2019), The Treasury’s Responsibility for the Results of Public Spending, Institute for Government, p 5. xxiv Hazell, R et al (2018), p 76. ii

xxv

Ibid, p 8, p 89-90 The Government Lead Non-Executive (2019), p 13. xxvii Hazell, R et al (2018), p 53. xxviii Ministers reflect: Mark Francois, Institute for Government, November 2016 https://www.instituteforgovernment.org.uk/ministers-reflect/wp-content/uploads/2017/02/Mark-Francois.pdf xxix In correspondence with author xxx Former senior government adviser, in conversation with author xxxi Hazell, R et al (2018), p. 100 xxxii Ibid, p. 60 xxxiii Ibid, p. 56-57 xxxiv Corporate governance expert, private conversation. xxxv Hazell, R et al (2018), p102. xxxvi Ibid, p 9. xxxvii Ibid, p 95. xxxviii In correspondence with author xxvi