Headlines: March 1st, 2005

Fifteen years after the Cadbury Report changed the course of governance in the private sector, Sir Adrian Cadbury called for a display of missionary zeal to achieve excellence in public service governance. He was addressing a conference to promote the recently published good governance standards. It was attended by chairs, governors and top executive of local councils, health trusts, police authorities, probation boards, universities and colleges, the National Audit Office and the Audit Commission.A report from the Office for Public Management in 2003 showed severe weaknesses in the governance of public bodies with many governors unsure about the process of governance and confused about their responsibilities. Following the report the Chartered Institute of Public Finance and Accountancy, the Joseph Rowntree Foundation and OPM set up an independent commission to devise good governance standards for the public sector.

The Government was said to be ambivalent about improving the quality of governance. Whitehall currently communicates directly with chief executives and there are only tenuous links to chairs of governing bodies. To reinforce the message that governance matters and that there is a close relationship between governance and productivity, the conference was presented with evidence from a survey by Deutsche Bank. The survey found that companies rated as excellent in governance were ten times more profitable than those with a poor rating.

Building the capacity of those elected, nominated or appointed to governance roles was seen as a key factor in improving the quality of governance across the public sector. Induction arrangements need to be improved and a greater use of mentoring and shadowing would bring benefits. Shadowing non executive directors in organizations outside the service boundaries would give insights into common issues and improve partnership working. There was also a call for an annual appraisal of board performance and of the performance of individual members of boards.