This week saw the first ever meeting of the government’s new cadre of Lead Non-Executive Directors. Bringing together the recently appointed top Neds for their respective departments, the meeting introduced the group to the workings of Whitehall, the government’s reform agenda, and how they fit into ministers’ overall strategy.
Charged with the task of bringing the government’s Whitehall boards reform plans to fruition, they face a challenging road ahead. Getting to this point was no small job, but more remains to be done for Whitehall boards to reach their potential.
While a seemingly novel innovation of public management, boards in government departments have existed in one form or another for nearly 20 years. Their evolution as a fixture of Whitehall governance has varied significantly by department, as some have embraced them more readily than others.
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. Prior Institute for Government research on Whitehall boards, found in our report Shaping Up, reached the central conclusion that the role of these is often poorly defined, leaving many boards unable to make an impact on the department.
Recognising both the potential added value of boards, as well as their shortcomings, the coalition government is currently bringing through a number of structural reforms aimed at ramping up board effectiveness. Secretaries of state will now chair departmental boards – previously left to permanent secretaries – and they will be backed up by newly recruited Lead Non-Executive Directors.
While these structural reforms aim to improve departmental governance, they fail to resolve the core issue afflicting departmental boards – namely that neither the government nor departments have clearly addressed the remit and accountability arrangements for boards. The recently updated guidance suggests they will be advisory, while in a recent Public Accounts Committee hearing, Lord Browne described the new boards as both supervisory and advisory – a somewhat contradictory description.
Under existing arrangements, departmental accountability rests with the secretary of state for policy and performance; and with the permanent secretary for the stewardship of departmental resources. If the secretary of state and permanent secretary share ultimate responsibility for the management of their department, what is the board accountable for? In changing the dynamic of the board without resolving the issue of accountability, the new enhanced protocol may further confuse, rather than clarify, the role of the board.
But written codes and guidance only goes so far in making a board work. Much will be down to the people around the table. In analysing over 40 interviews with Whitehall board members, our findings reflect a boardroom culture where consensus takes precedence over independent thought, candidness and challenge.
Behaviours one would expect to observe in high-performing private sector boards, such as ‘analytical thinking’, ‘candidness’, and ‘leadership’, were among the least commonly observed by our interviewees. This will make for an interesting transition as new Lead Neds move from the boardrooms of the private sector to those in Whitehall.
There is enormous potential in the Cabinet Office’s proposed reforms for departmental boards. But several key challenges remain to getting these reforms off the ground. First, the role, responsibility, and decision-making powers of the board will need to be clearly defined and understood by all members. Second, secretaries of state will have to learn to chair their new boards effectively and stay committed to the process.
Finally, Lead Neds will need to be given adequate support from the centre and from their department as they seek to make an immediate impact in their role. They will also need to support their secretary of state taking on their new role as chair.
As it stands, departments themselves will have to address these challenges. If they do, these new-look boards could be a powerful mechanism for driving better departmental performance.
Jonathan McClory is a senior researcher at the Institute for Government and co-author of the report All Aboard? – Whitehall’s new governance challenge