Transcript Leadership Performance in the Public Sector

Developing Governance &
Leadership Performance in
the Public Sector
John Halligan
Professor of Public Administration
Deputy Head, Division of Business, Law &
Information Sciences
University of Canberra
[email protected]
Public Sector Governance
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Corporate governance to public sector governance
Public sector versus private sector
Governance: corporate & organisational
Developing governance
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Advocacy of CG & PSG
Promotion of elements of governance
Demarcating the field
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DoFA’s categorisation of 955 govt bodies
Basic models: corporation, dept of state and hybrids
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Values of Good
Public Sector Governance
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Accountability
Transparency
Integrity
Stewardship
Leadership
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ANAO 2003
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CG Principles & Elements
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Focus on foundations for management & oversight
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Structure board to add value
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Eg establish code of conduct
Safeguarding integrity in financial reporting
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Eg Chair & majority of independent directors
Promoting ethical & responsible decision-making
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Eg formalise management/board functions/roles
Eg establish audit committee,
Managing risk
Enhancing performance culture
Recognising stakeholder interests
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Sources: ASX Corporate Governance Statement 2003; ANAO 2003
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Contingent on Type of
Organisation
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Legislative basis & type of board
Corporate governance roles
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Chair, Board, Minister & relationships
Executive boards
Advisory (dependent on CEO)
Mixes of policy, governance etc
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Corporate Boards v PS Executive Boards
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Secretary/CEO/MD has ultimate/shared responsibility?
Board members have consultative/decision-making roles?
Board members have statutory/directors’ duties for which
they are personally liable?
Board members are wholly internal/external?
Board members are subject to formal/informal ministerial
direction/influence in terms of appointment, decisionmaking, & dismissal?
Board members have other/ministerial roles?
Board members have little/much control over their
Secretary/CEO/MD?
Board members are/aren’t answerable directly to
Secretary/CEO/MD?
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Horrigan 2004
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Key Governance Issues: Boards
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Different board concepts in FMA agencies & CAC
bodies
Board appointments
Conflicts of roles & representational interests for
board members
Governance expertise of board appointees
Interaction between government policy & board
autonomy
Need for protocols in Minister-Board-Agency
comunication
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Sources: NIG 2003, CGP 2004
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Key Governance Issues
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Whole-of-government issues
Handling of portfolio agencies under emerging
regime
Risk management
Cross-portfolio & cross-governmental policy
coordination
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Sources: NIG 2003, CGP 2004
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Two Phases of Howard Govt
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1: Private sectorising dominant
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Privatisation, competitive tendering, outsourcing etc
APS arms length & dictates of market or private sector practice
Public-private differences minimised – rise of corporate
governance
2: Strengthen PS capacity & direction
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Role of central agencies, oversight & integration
Public-private differences emphasised
Reassertion of public sector governance
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Post-Uhrig Environment
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Implications
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Principles for public sector agencies
Focus on binary approach to structure
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Corporate board & Executive management
Departmentalisation
Strengths of Uhrig
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Recognises limitation of purchaser/provider
Need to streamline range of different
organisational types
Appropriate use of board concept
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Post-Uhrig Issues
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Limitations of Uhrig
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First principles approach
Emphasis on private sector expertise
Narrow approach to governance
Simplistic dichotomy
Governance questions for bodies eg ABA,
ABC, ATSIC etc
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Sources: Wettenhall 2004
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Leadership Performance
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Different approaches to leadership
Focusing on performance?
Several leaderships
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Corporate governance
Organisational
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Leaders & Performance
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Initial observations
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Recent review of CG
No rigid adherence to prescriptions
Adapt to agency and its environment
Leadership styles
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1: Compliance
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2: Instrumentalist
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Legality, directives & probity
Delivering government objectives
3: Human relationships
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Softer concepts
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Governance & Performance
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Assumptions about relationship between private
sector board attributes & organisational
performance
Objective (Hard) measures
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Separation of roles of chair/CEO?
Independent/non-executive directors?
Board size
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Governance & Performance 2
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‘Soft’ (qualitative) factors
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Roles, responsibilities and relationships?
Board, committee, leadership dynamics
Board cultures, trust and oversight stance
Information & communication flows
(Edwards 2004)
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Building Effective Boards – NDPB
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Enhancing effectiveness of independent
boards of executive non-departmental bodies
Model
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3 crucial elements of high performing boards
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Structure & functions
Actions & behaviours
Performance evaluation
Framework
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8 essential components of high performing boards
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Each has key elements of good practice & indicators of
strong performance
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Barker 2004 (HM Treasury)
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Elements of High Performing Boards
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Structure & functions
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Actions & behaviours
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Executive function & purpose
Board function & position
Fit for purpose – skills, knowledge etc
Effective board leadership & decision making
Board’s relationships
Performance evaluation
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Board & member performance
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Source: Barker 2004 (HM Treasury)
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Corporate Governance
ARC Project Overview
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Univ. Canberra’s Australian Research Council Linkage Grant:
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Examines structures & processes of public administration of:
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Agencies under Commonwealth Authorities & Companies (CAC) Act 1997
Departments/agencies under Financial Management & Accountability (FMA) Act 1997
Principal Investigators at University of Canberra:
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Corporate Governance in the public sector - the tensions, gaps &
potential
Professors Meredith Edwards, John Halligan, Bryan Horrigan; Mr Geoff Nicoll
Project Output
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Issue papers
Conference & Workshop
Academic books & Handbook
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Corporate Governance
ARC Project
Our Industry Partners
________________________
Sponsorship monies have also been provided to the Project
from the Australian Public Service Commission
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Specific Questions
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Public-Private Comparisons of governance
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Public Sector Governance
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Similarities & differences of public & private organisations
How far can you go in adopting private sector governance within
the APS?
Different types of governance arrangements within public sector
Is there a separate public sector model?
Selected Issues
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What determines the success of Boards in the APS?
How are the interests of stakeholders represented in the different
forms of public sector governance?
How are corporate governance elements like accountability,
conformance & performance manifested?
Are there principles of design & practice in public sector corporate
governance that can guide future decisions in this area?
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Conclusion: Issues & Directions
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Implementing Uhrig?
New governance environment & balance?
Challenges of horizontal governance &
participatory governance?
Connecting governance to performance?
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Corporate Gov Developments in Public
Sector: Major Documents
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Conflicts and Tensions in Commonwealth Public Sector Boards (NIG,
2003)
Current Issues in Public Sector Governance (NCCLPR & NIG, 2003)
Public Sector Governance Volumes 1 & 2: Better Practice Guides
(ANAO, 2003)
Review of Corporate Governance of Statutory Authorities and Office
Holders (Uhrig Report), 2003 (released 2004)
Public Sector Governance – Australia (CCH, 2004)
List of Australian Government Bodies 2002-2003 (DoFA 2004)
Building Effective Boards: Enhancing the Effectiveness of
Independent Boards in Executive Non-Departmental Public Bodies
(UK Treasury, 2004)
ARC-funded public sector corporate governance research project
(http://www.blis.canberra.edu.au/corpgov%2Daps/whatsnew/default.htm)
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