Governance
in the Public Sector
In the private sector, a series of
high-profile reports (Cadbury, Greenbury, Hampel, Turnbull
and, most recently, Higgs) has strengthened governance
considerably. These
have resulted in The
Combined Code: Principles of Good Governance and Code of Best
Practice
(updated in July 2003).
This provides a framework for shareholders and
stakeholders to call upon boards to comply with the commonly
accepted standards or explain their reasons for not doing so.
For public service, there has been no
equivalent document that sets out shared principles of good
governance. In the
complex and diverse world of public service provision, no
organisation had been charged with developing overarching and
common principles to help the many different organisations and
their governors work to a common standard.
In response to this void, OPM and CIPFA, with funding
from the Joseph Rowntree Foundation, established an
Independent Commission to develop a common standard for good
governance across all public services.
The good governance standard now proposed
builds on the seven principles for the conduct of people in
public life established by the Committee on Standards in
Public Life. Known
as the Nolan principles, these are: selflessness,
integrity, objectivity, accountability, openness, honesty and
leadership. The
commission has proposed six core principles of good governance
for public service organisations and has shown how these
should be applied if organisations are to live up to the
standard. The
proposals are set out in The
good governance standard for public services - Draft for
consultation (September 2004).
The commission defined governance
in the public service context as the leadership, direction and
control of public service organisations to ensure that they
achieve their agreed aims and objectives and in doing so serve
the public’s best interests.
The standard
comprises six core principles of good governance, each with
its supporting principles as follows:
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1 |
Good
governance means focusing on the organisation’s
purpose and outcomes for citizens and users
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Being clear about the
organisation’s purpose and its intended outcomes
for citizens and service users
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Ensuring that users receive a high
quality service
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Ensuring that taxpayers receive
value for money
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2 |
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Being clear about the functions of
the governing body
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Being clear about the
responsibilities of non-executives and the
executive and ensuring those responsibilities are
carried out
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Being clear about relationships
between governors and the public
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3 |
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Putting organisational values of good governance
into practice
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Individual governors behaving in ways that
uphold and exemplify effective governance
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4 |
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Being rigorous and transparent about
how decisions are taken
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Having and using good quality
information, advice and support
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Having effective controls in place,
including managing risk
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5 |
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Ensuring that appointed and elected
governors have the skills and experience they need
to perform well
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Developing the capacity of people
with governance responsibilities and evaluating
their performance
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Striking a balance, in the
membership of the governing body, between
continuity and renewal
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6 |
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Understanding formal and informal
accountability relationships
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Taking an active and planned
approach to accountability to the public
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Taking an active and planned
approach to responsibilities to staff
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Engaging effectively with
institutional stakeholders
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