Headlines: October 20th, 2003

Public bodies need to look at how their corporate governance arrangements are working and tackle weaknesses. Poor corporate governance is at the heart of many public service failures, but good governance can contribute to high-quality services and greater community cohesion. This message from the Audit Commission results from a close look at how corporate governance is working across the health service, local authorities, police and probation service.A key role of corporate governance is maintaining public trust and the Commission found that public bodies fare badly on the ‘negative ‘ drivers of trust. They are perceived to have poor leaders and managers and to be uninterested in peoples’ views. It is clear that the more open and honest organisations are with themselves about their performance, the more open and honest they can be with service users and the public. This honesty is the foundation for deciding appropriate action to remedy poor performance.

The principal weakness across all the areas examined was financial management. In addition the police and local authorities were found also to have weak risk management and internal controls. The research identified warning signs of service failure including poor working relationships, closed culture, poor leadership and lack of clarity.

The report ‘Good Governance – Improvement and Trust in Local Public Services’ argues that governance is more than making sure that things do not go wrong or fixing them if they do. It is essentially about adding value and ensuring effectiveness in ever changing circumstances. It achieves more than meeting performance targets, rather it balances the need for compliance with the benefits of being creative about what the organisation does and how it does it. It concludes with a plea for regular review of governance arrangements.

Link: http://ww2.audit-commission.gov.uk/static/pdf/CorporateGovernance.pdf