Headlines: March 28th, 2001

Government departments have been told by Sir John Bourne, the Comptroller and Auditor General to get a grip on corporate governance and risk management. He is Parliament’s watchdog for all government departments and a wide range of other public sector bodies.Corporate governance in government is going through an evolutionary process. The need for top management to steer the organization was first recognized in a report from the Treasury in 1986. As a result of the Cadbury Committee report in 1992 about the role of board members in the private sector and the establishment of audit committees, departments tightened up financial controls. Following the Turnbull Committee report in 1999 recommending that in the private sector the board should be responsible for all systems of internal control, the Treasury issued guidelines on implementing the recommendations in central government.

The challenge for departments now is to ensure that the board sets strategic aims, provides the leadership to put them into effect, supervises the management of the business and reports to stakeholders on its stewardship. Departments are finding difficulty in achieving the same level of control over operational systems that they have built up over financial systems, but the National Audit Office has offered help.