The Good Governance Standard for Pblic Services The Independent Commission for Good Governance in Pblic Services
The Independent Commission for Good Governance in Pblic Services, chaired by Sir Alan Langlands, worked throghot 2004. Throgh two ronds of consltation, the Commission drew on the views of a wide range of people with experience of governance, and of service sers and citizens, to prodce the Good Governance Standard for Pblic Services. The Standard presents six principles of good governance that are common to all pblic service organisations and are intended to help all those with an interest in pblic governance to assess good governance practice. The Independent Commission for Good Governance in Pblic Services was established and spported by the Office for Pblic Management (OPM ) and the Chartered Institte of Pblic Finance and Accontancy (CIPFA), in partnership with the Joseph Rowntree Fondation.
The Good Governance Standard for Pblic Services The Independent Commission on Good Governance in Pblic Services
Good Governance Standard for Pblic Services OPM and CIPFA, 2004 OPM (Office for Pblic Management Ltd) 252b Gray s Inn Road London WC1X 8XG tel: 020 7239 7800 fax: 020 7837 5800 email: office@opm.co.k web: www.opm.co.k CIPFA (The Chartered Institte of Pblic Finance and Accontancy) 3 Robert Street London WC2N 6RL tel: 020 7543 5600 fax: 020 7543 5700 web: www.cipfa.org.k ISBN: 1 898531 86 2 This book may not, in part or in whole, be copied, photocopied, translated or converted into any electronic or machine-readable form withot prior written permission from OPM or CIPFA. Design and layot by Amanda Little Printed by Hackney Press Ltd II
Good Governance Standard for Pblic Services Contents Membership of the Commission...iv Foreword...v Abot the Commission...vi Using the Standard... 1 Principles of good governance... 4 1. Good governance means focsing on the organisation s prpose and on otcomes for citizens and service sers... 7 1.1 Being clear abot the organisation s prpose and its intended otcomes for citizens and service sers... 7 1.2 Making sre that sers receive a high qality service... 8 1.3 Making sre that taxpayers receive vale for money... 8 2. Good governance means performing effectively in clearly defined fnctions and roles... 9 2.1 Being clear abot the fnctions of the governing body... 9 2.2 Being clear abot the responsibilities of non-exectives and the exective, and making sre that those responsibilities are carried ot... 10 2.3 Being clear abot relationships between governors and the pblic... 11 3. Good governance means promoting vales for the whole organisation and demonstrating the vales of good governance throgh behavior... 13 3.1 Ptting organisational vales into practice... 13 3.2 Individal governors behaving in ways that phold and exemplify effective governance... 14 4. Good governance means taking informed, transparent decisions and managing risk.. 15 4.1 Being rigoros and transparent abot how decisions are taken... 15 4.2 Having and sing good qality information, advice and spport... 16 4.3 Making sre that an effective risk management system is in operation... 16 5. Good governance means developing the capacity and capability of the governing body to be effective... 19 5.1 Making sre that appointed and elected governors have the skills, knowledge and experience they need to perform well... 19 5.2 Developing the capability of people with governance responsibilities and evalating their performance, as individals and as a grop... 20 5.3 Striking a balance, in the membership of the governing body, between continity and renewal... 21 6. Good governance means engaging stakeholders and making accontability real... 23 6.1 Understanding formal and informal accontability relationships... 23 6.2 Taking an active and planned approach to dialoge with and accontability to the pblic... 24 6.3 Taking an active and planned approach to responsibility to staff... 24 6.4 Engaging effectively with instittional stakeholders... 25 Appendix A: Assessment qestions for governors and governing bodies to ask themselves...27 Appendix B: Qestions for members of the pblic and their representatives to ask if they want to assess and challenge standards of governance... 31 III
Good Governance Standard for Pblic Services Membership of the Commission Chair of the Commission Sir Alan Langlands, Principal and Vice Chancellor, University of Dndee Commission members Lord Richard Best, Director, Joseph Rowntree Fondation Sir Ian Blair, Depty Commissioner, Metropolitan Police Service Mr Jim Colter, Chief Exective, National Hosing Federation Ms Lcy de Groot, Exective Director, Improvement and Development Agency Ms Liz Kerry, Chief Exective, Yorkshire and Hmber Assembly Mr Bob Kerslake, Chief Exective, Sheffield Conty Concil Mr Ed Mayo, Chief Exective, National Consmer Concil Dr Greg Parston, Exective Chairman, OPM Ms Bharti Patel, to October 2004 Director of Commnications, Ethnic Minority Fondation The Honorable Barbara Thomas, Depty Chair, Financial Reporting Concil and from September 2004 Chairman, United Kingdom Atomic Energy Athority Ms Jo Williams cbe, Chief Exective, Mencap Co-secretaries to the Commission Steve Freer, Chief Exective, CIPFA Adrienne Fresko cbe, Head of the Centre for Pblic Governance, OPM (to 30 September 2004) Jane Steele, Head of Pblic Interest Research, OPM (from 1 October 2004) Head of Research for the Commission Jane Steele, Head of Pblic Interest Research, OPM Research and spport team Kerry Ace, Finance and Policy Manager, CIPFA Andrea Carr, Project Administrator, OPM Robert Coffey, Researcher, OPM (from September 2004) Kerri Hampton, Senior Researcher, OPM (to September 2004) Sandra Harper, Grop Administrator, CIPFA Vernon Soare, Policy and Technical Director, CIPFA IV
Good Governance Standard for Pblic Services Foreword By 2005/6, pblic expenditre in the UK will exceed 500 billion 1. How this money is spent and the qality of services it provides is critically important to s all as sers of services and as taxpayers. Becase of this we all need governance of or pblic services to be of a high standard. Good governance leads to good management, good performance, good stewardship of pblic money, good pblic engagement and, ltimately, good otcomes 2. The governors of or pblic service organisations face a difficlt task. They are the people responsible for governance the leadership, direction and control of the organisations they serve. Their responsibility is to ensre that they address the prpose and objectives of these organisations and that they work in the pblic interest. They have to bring abot positive otcomes for the people who se the services, as well as providing good vale for the taxpayers who fnd these services. They have to balance the pblic interest with their accontability to government and an increasingly complex reglatory environment, and motivate front-line staff by making sre that good exective leadership is in place. Governors sholder a heavy responsibility in relation to health, edcation, hosing, criminal jstice and many other aspects of pblic service. More than 450,000 people 3 contribte as governors to a wide range of pblic service organisations and partnerships. There is clear evidence that many have difficlties in flfilling these responsibilities 4. To help them with their tasks, there is an rgent and ongoing need to be clear abot the prpose of governance and the role of the governor, expand the spply of governors, improve indction programmes and encorage good relationships between governors and the exective teams who are accontable to them. It is perhaps srprising that there is no common code for pblic service governance to provide gidance across the complex and diverse world of pblic services, which are provided by the pblic sector and a range of other agencies. The Good Governance Standard for Pblic Services addresses this isse head on. It bilds on the Nolan principles 5 for the condct of individals in pblic life, by setting ot six core principles of good governance for pblic service organisations. It shows how these shold be applied if organisations are to live p to the Standard and provides a basis for the pblic to challenge sb-standard governance. I hope that the pblication of the Standard will encorage pblic bodies to review their own effectiveness, and that it will provide commissioners and reglators of pblic services with a common framework for assessing good governance practice. It has been a privilege to take part in this work and my personal thanks go to the members of the Commission, the Commission secretaries and the head of research, who simply want to help governors do a difficlt job better. I also grateflly acknowledge the spport provided by the Joseph Rowntree Fondation and the commitment of CIPFA (Chartered Institte of Pblic Finance and Accontancy) and OPM (Office for Pblic Management). Sir Alan Langlands Chair of the Commission Janary 2005 V
Good Governance Standard for Pblic Services Abot the Commission The Independent Commission on Good Governance in Pblic Services was established by the Office for Pblic Management (OPM ) and the Chartered Institte of Pblic Finance and Accontancy (CIPFA), in partnership with the Joseph Rowntree Fondation. The role of the Commission was to develop a common code and set of principles for good governance across pblic services. The Commission began work early in 2004. The first stage was to conslt a wide range of stakeholders, throgh face-to-face discssions and meetings arond the UK and a process of inviting written contribtions from all types of pblic service organisations. This consltation focsed on the potential vale of a common code or set of principles for governing all pblic services, and soght views on what the code shold inclde. Following this consltation, the Commission prodced a draft of the Good Governance Standard for Pblic Services. The draft was the sbject of a second rond of consltation in the atmn of 2004. This inclded meetings with service sers and citizens, to explore the potential vale of the Standard from their point of view. The Standard was then amended to reflect the views expressed in the consltation. Frther information abot the work of the Commission and the responses to both ronds of consltation are available at www.opm.co.k/icggps. 1 Spending Review 2004, HM Treasry 2 For example, standards of corporate governance have a central place in the Adit Commission s comprehensive performance assessment of the qality of services provided by local athorities 3 Estimated nmber of members of governing bodies of pblic services in the UK 4 For example Rbber Stamped?, OPM, 2003 5 Committee on Standards in Pblic Life, 1995 VI
Good Governance Standard for Pblic Services Using the Standard The prpose of the Standard We intend the Good Governance Standard for Pblic Services as a gide to help everyone concerned with the governance of pblic services not only to nderstand and apply common principles of good governance, bt also to assess the strengths and weaknesses of crrent governance practice and improve it. We hope that the Standard will be sefl to governors who are striving to do a difficlt job better, and to individals and grops who have an interest in scrtinising the effectiveness of governance. The Standard focses on the ways different fnctions of governance can spport each other. Governance is dynamic: good governance encorages the pblic trst and participation that enables services to improve; bad governance fosters the low morale and adversarial relationships that lead to poor performance or even, ltimately, to dysfnctional organisations. Scope of the Standard The Good Governance Standard for Pblic Services is intended for se by all organisations and partnerships that work for the pblic, sing pblic money. Most of these are pblic sector organisations whose services are sed directly by members of the pblic or who are responsible for less visible activities, sch as reglation and policy development. However, the se of pblic money to provide pblic services is not limited to the pblic sector. The pblic also has an interest in the governance of non-pblic sector organisations that spend pblic money, and the Standard is designed to help them too. Relationship with other codes and gidance While the Standard has a wide scope, it does not seek to dplicate the codes and gidance that already exist for some specific types of organisation. We hope that those who develop and set these codes will refer to the Standard in pdating and reviewing their own codes, and se it to enhance the debate abot governance within and between different sectors. Where codes and gidance do not already exist, as in many formal and informal partnerships, we hope that the Standard will provide a shared nderstanding of what constittes good governance. Applying the Standard to different governance strctres and sizes of organisation The principles form a niversal Standard of good governance and we encorage all organisations to show that they are ptting it into practice in a way that reflects their strctre and is proportionate to their size. We recognise that not all parts of the Standard will appear to be directly applicable to all types and size of organisation. 1
Good Governance Standard for Pblic Services The many types of organisations to which the Standard applies central government and local service providers, and pblic sector and independent organisations have a wide range of governance strctres; for example, some governing bodies will be elected and some appointed. Organisations also vary enormosly in size and complexity, from, for example, a small school to a large hospital trst. We call on governing bodies to report pblicly on the extent to which they live p to the Standard, and explain why and how they have adapted any of the principles and their applications to sit their type and size of organisation. In doing so, we ask organisations to demonstrate the spirit and ethos of good governance, which the Standard aims to captre and which cannot be achieved by rles and procedres alone. Ptting the Standard into practice The Standard comprises six core principles of good governance, each with its spporting principles. The Application box next to each spporting principle explains what shold be done to pt it into practice. At the end of each section, good practice examples illstrate ways of ptting the principles into practice. Appendix A comprises qestions that governing bodies shold ask themselves to test how far they live p to the Standard, and to develop action plans for making any necessary improvements. Appendix B comprises qestions for members of the pblic or their representatives to ask if they want to nderstand or challenge the governance of pblic service organisations. We also sggest that organisations ask themselves these qestions to test their own openness and accontability to the pblic. The qestions cold be sed as a basis for freqently asked qestions (FAQs) on pblic websites. Terminology In order to be applicable to different kinds of organisation, the Standard ses some general terms, with the following definitions: Governing body: the body with overall responsibility for directing and controlling an organisation. For example, the police athority; the governors of a school; the board of a hosing association, an NHS trst or a non-departmental pblic body; the concil in local government Governor: member of the governing body, whether elected or appointed. For example, member of a police athority, school governor, board member of a hosing association or non-departmental pblic body, exective or non-exective director of an NHS trst, elected member or concillor of a local athority Non-exective: governors withot exective responsibilities (nonexective directors are sometimes referred to as independent directors) Exective: the senior staff of the organisation. Some types of boards inclde exective directors as governors. 2
Good Governance Standard for Pblic Services The term exective has a different meaning in local government in England and Wales, where the exective comprises elected representatives. There are three possible strctres for the exective : a concil leader, elected by the fll concil, who appoints concillors to a cabinet; a directly elected mayor who appoints concillors to a cabinet; a directly elected mayor and a concil manager, who is an officer. In NHS fondation trsts, the governing body is the board of directors while the grop known as governors form a separate body. We hope that the Standard will help all those with an interest in pblic governance to assess good governance practice. Sir Alan Langlands Lord Richard Best Sir Ian Blair Mr Jim Colter Ms Lcy de Groot Ms Liz Kerry Mr Bob Kerslake Mr Ed Mayo Dr Greg Parston Ms Bharti Patel The Honorable Barbara Thomas Ms Jo Williams CBE Members of the Independent Commission on Good Governance in Pblic Services Janary 2005 3
Good Governance Standard for Pblic Services Principles of good governance The standard comprises six core principles of good governance, each with its spporting principles. 4
Good Governance Standard for Pblic Services 1. Good governance means focsing on the organisation s prpose and on otcomes for citizens and service sers 1.1 Being clear abot the organisation s prpose and its intended otcomes for citizens and service sers 1.2 Making sre that sers receive a high qality service 1.3 Making sre that taxpayers receive vale for money 2. Good governance means performing effectively in clearly defined fnctions and roles 2.1 Being clear abot the fnctions of the governing body 2.2 Being clear abot the responsibilities of non-exectives and the exective, and making sre that those responsibilities are carried ot 2.3 Being clear abot relationships between governors and the pblic 3. Good governance means promoting vales for the whole organisation and demonstrating the vales of good governance throgh behavior 3.1 Ptting organisational vales into practice 3.2 Individal governors behaving in ways that phold and exemplify effective governance 4. Good governance means taking informed, transparent decisions and managing risk 4.1 Being rigoros and transparent abot how decisions are taken 4.2 Having and sing good qality information, advice and spport 4.3 Making sre that an effective risk management system is in operation 5. Good governance means developing the capacity and capability of the governing body to be effective 5.1 Making sre that appointed and elected governors have the skills, knowledge and experience they need to perform well 5.2 Developing the capability of people with governance responsibilities and evalating their performance, as individals and as a grop 5.3 Striking a balance, in the membership of the governing body, between continity and renewal 6. Good governance means engaging stakeholders and making accontability real 6.1 Understanding formal and informal accontability relationships 6.2 Taking an active and planned approach to dialoge with and accontability to the pblic 6.3 Taking an active and planned approach to responsibility to staff 6.4 Engaging effectively with instittional stakeholders 5
Good Governance Standard for Pblic Services 6
Good Governance Standard for Pblic Services 1. Good governance means focsing on the organisation s prpose and on otcomes for citizens and service sers The fnction of governance is to ensre that an organisation or partnership 6 flfils its overall prpose, achieves its intended otcomes for citizens and service sers, and operates in an effective, efficient and ethical manner 7. This principle shold gide all governance activity. Each organisation has its own prpose. There are also some general prposes that are fndamental to all pblic governance, inclding providing good qality services and achieving vale for money. The concept of pblic vale can be helpfl when thinking abot the niqe prpose of pblic services and therefore of their governance. Pblic vale refers to the things that pblic services prodce, either directly or indirectly, sing pblic money. Pblic vale incldes: otcomes (sch as improved health and improved safety); services (sch as primary care services and policing); and trst in pblic governance. 1.1 Being clear abot the organisation s prpose and its intended otcomes for citizens and service sers Having a clear organisational prpose and set of objectives is a hallmark of good governance. If this prpose is commnicated effectively, it can gide people s actions and decisions at all levels in an organisation. For many organisations, others (in particlar, central government 8 ) play a major role in determining policy and resorces and in setting or agreeing objectives. In these circmstances, it is critically important that there is a common view of the organisation s prposes and its intended otcomes. Application The governing body shold make sre that there is a clear statement of the organisation s prpose and that it ses this as a basis for its planning. It shold constantly review the decisions it takes, making sre that they frther the organisation s prpose and contribte to the intended otcomes for citizens and sers of services. 6 Throghot the docment, organisation shold be read to inclde partnership. 7 For example, a school s prpose might be to edcate children; its intended otcomes might inclde improved literacy and nmeracy of children by the age of 11. 8 Often described as a dominant stakeholder role. 7
Good Governance Standard for Pblic Services 1.2 Making sre that sers receive a high qality service All pblic service organisations provide a service to other people and/or organisations, althogh not all provide services directly to members of the pblic. The qality of service is an important measre of how effective an organisation is, and so it is particlarly important in governance. Users of pblic services, nlike consmers in the private sector, sally have little or no option to go elsewhere for services or to withdraw payment 9. Providers of pblic services have fewer direct financial incentives than private companies to improve consmer satisfaction. Organisations that provide pblic services therefore need to take additional steps to ensre that services are of a high qality. Application The governing body shold decide how the qality of service for sers is to be measred and make sre that it has the information it needs to review service qality effectively and reglarly. As part of this, it shold ensre that it has processes in place to hear the views of sers and non-sers from all backgronds and commnities abot their needs, and the views of service sers from all backgronds abot the sitability and qality of services. The governing body shold se this information when making decisions abot service planning and improvement. 1.3 Making sre that taxpayers receive vale for money All organisations that spend pblic money, either in commissioning services or providing them directly, have a dty to strive for economy, efficiency and effectiveness in their work. Citizens and taxpayers have an important and legitimate interest in the vale for money provided by organisations that se pblic money. Application The governing body shold decide how vale for money is measred and make sre that it has the information it needs to review vale for money effectively, inclding information abot similar organisations, for comparison. It shold se this information when planning and reviewing the work of the organisation. Good practice examples: focsing on the organisation s prpose and on otcomes for citizens and service sers Compare information abot the efficiency, effectiveness and qality of service provided by similar organisations; analyse why levels of efficiency, effectiveness and qality are different elsewhere. Give non-exective directors a specific responsibility to ensre that information abot sers experiences is collected, broght to the attention of the governing body and sed in its decision making. 9 Government policy is to increase choice in pblic services; nevertheless, consmer choice is either not available or limited in most areas of pblic services. 8
Good Governance Standard for Pblic Services 2. Good governance means performing effectively in clearly defined fnctions and roles Good governance reqires all concerned to be clear abot the fnctions of governance and their own roles and responsibilities and those of others, and to behave in ways that are consistent with those roles. Being clear abot one s own role, and how it relates to that of others, increases the chance of performing the role well. Clarity abot roles also helps all stakeholders to nderstand how the governance system works and who is accontable for what. 2.1 Being clear abot the fnctions of the governing body Members of governing bodies are elected or appointed to direct and control pblic service organisations in the pblic interest 10. The primary fnctions of the governing body are to: establish the organisation s strategic direction and aims, in conjnction with the exective ensre accontability to the pblic for the organisation s performance assre that the organisation is managed with probity and integrity. In order to direct strategy and ensre that this is implemented and that the organisation achieves its goals, the governing body has to: allocate resorces and monitor organisational and exective performance 11 delegate to management oversee the appointment and contractal arrangements for senior exectives, and make sre that effective management arrangements are in place nderstand and manage risk. Ways of achieving these primary fnctions inclde: constrctively challenging and scrtinising the exective ensring that the voice of the pblic is heard in decision making forging strategic partnerships with other organisations. 10 Governors of charities (trstees) have an overriding dty to act in the interests of their charity and its beneficiaries, who are defined as part of its registration as a charity. Indstrial and provident societies (mtals) may be either for the mtal benefit of their members or of the commnity, depending on their form of registration. 11 Throghot, the term exective is sed to refer to the senior members of the organisation s paid staff. 9
Good Governance Standard for Pblic Services Some of these fnctions are the particlar responsibility of non-exective directors, where the governing body comprises both non-exective and exective members (see 2.2). Application The governing body shold set ot clearly, in a pblic docment, its approach to performing each of the fnctions of governance. This shold inclde a process, agreed with the exective, for holding the exective to accont for achieving agreed objectives and implementing strategy. The governors shold explain how and why their approach to each fnction is appropriate for the size and complexity of the organisation. 2.2 Being clear abot the responsibilities of non-exectives and the exective, and making sre that those responsibilities are carried ot Different pblic services have different types of governing body. In some cases, exective directors are members of the governing body; in other cases the governing body is made p entirely of non-exectives. For example, NHS trsts have nified boards that sally comprise five exective directors, five non-exective directors and the non-exective chair. In contrast, police athorities and some national pblic bodies have a spervisory body made p entirely of non-exectives. Government departments and non-departmental pblic bodies have acconting officers (sally the permanent secretary of a government department and the chief exective of an NDPB) who have personal responsibility to Parliament for the se of pblic fnds. In all cases, the governors take collective responsibility for the governing body s decisions. In both nified and spervisory arrangements, non-exectives have specific responsibilities in relation to the exective. Non-exective The non-exective role is to: contribte to strategy: non-exectives bring a range of perspectives to strategy development and decision making make sre that effective management arrangements and an effective team are in place at the top level of the organisation delegate: non-exectives help to clarify which decisions are reserved for the governing body, and then clearly delegate the rest hold the exective to accont: the governing body delegates responsibilities to the exective. Non-exectives have a vital role in holding the exective to accont for its performance in flfilling those responsibilities, inclding throgh prposefl challenge and scrtiny be extremely discriminating abot getting involved in matters of operational detail for which responsibility is delegated to the exective. Chair and chief exective (or lead exective) The chair and chief exective share in the leadership role. The chair s role is to lead the governing body, ensring it makes an effective contribtion to the governance of 10
Good Governance Standard for Pblic Services the organisation; and the chief exective s is to lead the organisation in implementing strategy and managing the delivery of services. A good working relationship between the two can make a significant contribtion to effective governance. The depty chair s role incldes spporting the chair in his or her role, and, on occasion, informing the chair of any concerns that governors have abot the condct of the governing body. Application The governing body shold clarify that all its members have collective responsibility for its decisions and have eqal stats in discssions. The chair and other governors shold challenge individal governors if they do not respect constrctive challenge by others or if they do not spport this collective responsibility for flfilling the organisation s prpose and for working towards intended otcomes for citizens and sers of services. The governing body shold set ot a clear statement of the respective roles and responsibilities of the non-exectives and the exective and its approach to ptting this into practice. The roles of chair and chief exective shold be separate and provide a check and balance for each other s athority. The chair and the chief exective shold negotiate their respective roles early in the relationship (within a framework in which the chair leads the governing body and the chief exective leads and manages the organisation) and shold explain these clearly to the governing body and the organisation as a whole. 2.3 Being clear abot relationships between governors and the pblic Governors and governing bodies need to be clear abot the natre of their relationship with the pblic. The governing body s role is to direct and control the organisation in the pblic interest (see 2.1) and to ensre accontability to the pblic (see 6.2). Being clear abot this increases the chances that governors and others will nderstand governors responsibilities to the pblic and be aware of the limitations of what they can be expected to do. Pblic service governors are either elected directly by the pblic or appointed by governing bodies and/or government 12. All governors share collective responsibility and accontability for the governing body s decisions 13. This incldes the governing body of a partnership, whose members may come from a range of organisations. As governors of the partnership, they are responsible for taking decisions that spport the partnership s prpose, not simply the interests of their parent organisation. Their different rotes to becoming a governor mean that elected and appointed governors have different types of relationship with the pblic. However, both are 12 Some charity trstees or governors of other independent not-for-profit organisations, sch as hosing associations, are appointed by a wider voting membership or by other external bodies. 13 Organisations in which political parties are prominent, e.g. local athorities, may by convention operate a system of collective responsibility within the controlling party or alliance, rather than within the governing body as a whole. 11
Good Governance Standard for Pblic Services accontable to the pblic and shold develop a dialoge that connects the organisation properly with the pblic they serve (see 6.2). The electoral process provides an additional accontability mechanism for elected governors and they can be said to represent the pblic, in the democratic sense of represent. Appointed governors backgronds and experience are often factors in their appointment. This means that they bring particlar perspectives or expertise, bt their views cannot be expected to be representative or typical of others with similar backgronds. It is very important that a wide range of experiences and perspectives inform governance decisions. This is enhanced by the participation of a cross-section of the pblic in governance decision making (see 5.1). Application Governors shold recognise their collective responsibility for the governing body s decisions and strive to make decisions that frther the organisation s prpose, rather than the interests of any specific grop or organisation with which they are associated. The governing body shold vale the perspectives which governors appointed from different backgronds bring, bt shold make clear that these appointed governors are not expected to provide the only sorce of information abot the specific grops whose backgrond or experiences they share. Where appointed governors are asked to provide athoritative information abot the views and experiences of sch grops, they shold have access to systems for collecting this information. The governing body, whether elected or appointed (or made p of both elected and appointed governors) shold ensre that the organisation engages effectively with the pblic and service sers to nderstand their views, and that the governing body has access to reliable information abot the range of pblic opinions and the satisfaction of all grops of sers of services. Good practice examples: performing effectively in clearly defined fnctions and roles The governing body can meet its responsibility for strategy by scrtinising and challenging proposals developed by the exective, or by involving itself actively in strategy formlation from the earliest stages. In developing and prsing the organisation s strategic direction, the governing body is advised to make jdgements abot, and help to reglate, the scale and pace of change that the organisation can handle sccessflly. In appointing and remnerating the top team, it is good practice to establish a remneration and appointments committee, made p of governors who are free of vested interests, to make recommendations to the governing body. Pblishing job descriptions for the chair, depty chair and chief exective can help others to know what to expect. Even for small organisations or partnerships with limited resorces, separation of the chair and the exective role is advisable, with the exective being responsible for ptting decisions into practice. 12
Good Governance Standard for Pblic Services 3. Good governance means promoting vales for the whole organisation and demonstrating the vales of good governance throgh behavior Good governance flows from a shared ethos or cltre, as well as from systems and strctres. It cannot be redced to a set of rles, or achieved flly by compliance with a set of reqirements. This spirit or ethos of good governance can be expressed as vales and demonstrated in behavior. Good governance bilds on the seven principles for the condct of people in pblic life that were established by the Committee on Standards in Pblic Life. Known as the Nolan principles, these are: selflessness, integrity, objectivity, accontability, openness, honesty and leadership. 3.1 Ptting organisational vales into practice A hallmark of good governance is the development of shared vales, which become part of the organisation s cltre, nderpinning policy and behavior throghot the organisation, from the governing body to all staff. These are in addition to compliance with legal reqirements on, for example, eqal opportnities and anti-discrimination. Application The governing body shold take the lead in establishing and promoting vales for the organisation and its staff. These vales shold be over and above legal reqirements (for example, anti-discrimination, eqal opportnities and freedom of information legislation) and shold bild on the Nolan principles. They shold reflect pblic expectations abot the condct and behavior of individals and grops who control pblic services 14. The governing body shold keep these vales at the forefront of its own thinking and se them to gide its decision making. 14 For example, National Centre for Social Research and Centre for Research into Elections and Social Trends Giding Principles: Pblic Attitdes Towards Condct in Pblic Life, The Committee on Standards in Pblic Life, Janary 2003 13
Good Governance Standard for Pblic Services 3.2 Individal governors behaving in ways that phold and exemplify effective governance Individal behavior is a major factor in the effectiveness of the governing body, and also has an inflence on the reptation of the organisation, the confidence and trst members of the pblic have in it and the working relationships and morale within it. Conflicts, real or perceived, can arise between the organisation s Application Governors shold live p to the Nolan principles and to any approved codes or gides to ethical condct for their organisation or sector. They shold also demonstrate throgh their behavior that they are focsing on their responsibilities to the organisation and its stakeholders. interests and those of individal governors (see 4.1). Pblic trst can then be damaged nless the organisation implements clear procedres to deal with these conflicts. Good practice examples: promoting vales for the whole organisation and demonstrating the vales of good governance throgh behavior The governing body promotes and pholds vales for the organisation. These may inclde: responding to a diverse pblic and striving to redce ineqality among service sers committing to openness and transparency in decisions and se of resorces striving for pblic good and ignoring personal interests promoting good relationships within the organisation, with the pblic and service sers and with other organisations. The governing body makes clear the standards of behavior that it expects from governors and staff. Good practice in the behavior of individal governors may inclde: attending reglarly and being actively involved in decision making informing oneself and preparing for decision making making contact with other organisations and forging and maintaining links with the world otside the organisation engaging willingly and actively with the pblic, service sers and staff, within an agreed commnication framework. 14
Good Governance Standard for Pblic Services 4. Good governance means taking informed, transparent decisions and managing risk Decision making in governance is complex and challenging. It mst frther the organisation s prpose and strategic direction and be robst in the medim and longer terms. To make sch decisions, governors mst be well informed. Governors making decisions need the spport of appropriate systems, to help to ensre that decisions are implemented and that resorces are sed legally and efficiently. A governing body may, for example, adopt the discipline of formally reviewing implementation of a new policy after a defined initial period, to see whether it is working as intended. Risk management is important to the sccessfl delivery of pblic services. An effective risk management system identifies and assesses risks, decides on appropriate responses and then provides assrance that the chosen responses are effective. 4.1 Being rigoros and transparent abot how decisions are taken Different types of organisation have different stattory reqirements for the pblication of their decisions 15. Over and above these reqirements, transparent decisions that are clearly explained are more likely to be nderstood by staff, the pblic and other stakeholders and to be implemented effectively. It is also easier to evalate the impact of decisions that are transparent, and therefore to have evidence on which to draw in making ftre decisions. A hallmark of good governance is a clearly defined level of delegation by the governing body to the exective for decision making. The governing body sets policies as parameters within which the exective works on the behalf of the governing body. For this to work well, it is important that governors do not concern themselves with levels of detail that are inappropriate for their role, while ensring that they are not too far removed to provide effective oversight and scrtiny. Application The governing body shold draw p a formal statement that specifies the types of decisions that are delegated to the exective and those that are reserved for the governing body. Governing bodies shold state clear objectives for their decisions. In their pblic record of decisions and in explaining them to stakeholders, they shold be explicit abot the criteria, rationale and considerations on which decisions are based, and, in de corse, abot the impact and conseqences of decisions. 15 There are also stattory reqirements for the types of decisions and information that can or mst be exclded from the pblic domain, e.g. information abot individals. 15
Good Governance Standard for Pblic Services Conflicts can arise between the personal interests of individals involved in making decisions and decisions that the governing body needs to make in the pblic interest. To ensre probity and to avoid pblic concern or loss of confidence, governing bodies have to take steps to avoid any sch conflicts of interest, whether real or perceived. 4.2 Having and sing good qality information, advice and spport Good qality information and clear, objective advice can significantly redce the risk of taking decisions that fail to achieve their objectives or have serios nintended conseqences. Governors need to receive rigoros analyses of comprehensive backgrond information and evidence, and of the options for action. As governance decisions are complex and can have significant conseqences, governors also need professional advice. This incldes advice on, for example, legal and financial matters and governance procedres. Sch professional advice is also needed at other levels in the organisation where decisions are taken. Application The governing body shold ensre that it is provided with information that is fit for prpose. It shold be tailored to the fnctions of the governing body (see 2.2) and not to detailed operational or management isses, with which the governing body shold not, in general, be concerned. Information shold provide a robst analysis and not obscre the key information by inclding too mch detail. The governing body shold ensre that information is directly relevant to the decisions it has to take; is timely; is objective; and gives clear explanations of technical isses and their implications. The governing body shold also ensre that professional advice on legal and financial matters is available and sed appropriately in its own decision making and elsewhere throghot the organisation when decisions that have significant legal or financial implications are taken. The governing body shold not be relctant to se the organisation s resorces to provide the information and advice that is needed for good governance. However, it shold not make disproportionate demands on the exective by asking for information that is not necessary or appropriate for the governing body s role. The governing body shold arrive at a jdgement abot its information needs in discssion with the exective. 4.3 Making sre that an effective risk management system is in operation Pblic service organisations face a wide range of strategic, operational and financial risks, from both internal and external factors, which may prevent them from achieving their objectives. Risk management is a planned and systematic approach to identifying, evalating and responding to risks and providing assrance that responses are effective. A risk management system shold consider the fll range of the organisation s activities and responsibilities, and continosly check that varios good management disciplines are in place, inclding: 16
Good Governance Standard for Pblic Services strategies and policies are pt into practice in all relevant parts of the organisation strategies and policies are well designed and reglarly reviewed high qality services are delivered efficiently and effectively performance is reglarly and rigorosly monitored and effective measres are pt in place to tackle poor performance laws and reglations are complied with information sed by the organisation is relevant, accrate, p-to-date, timely and reliable financial statements and other information pblished by the organisation are accrate and reliable financial resorces are managed efficiently and effectively and are safegarded hman and other resorces are appropriately managed and safegarded. A risk management system also spports the annal statement on internal control that many pblic service organisations now have to prodce. Appropriate responses to risk will inclde implementing internal controls, insring against the risk, terminating the activity that is casing the risk, modifying the risk or, in some circmstances, accepting the risk. Application The governing body shold ensre that the organisation operates an effective system of risk management. This shold inclde: identifying key strategic, operational and financial risks assessing the possible effects that the identified risks cold have on the organisation agreeing on and implementing appropriate responses to the identified risks (internal control, insre, terminate, modify, accept) ptting in place a framework of assrance from different sorces, to show that risk management processes, inclding responses, are working effectively reporting pblicly on the effectiveness of the risk management system throgh, for example, an annal statement on internal control, inclding, where necessary, an action plan to tackle any significant isses making it clear that the governing body carries ltimate responsibility for the risk management system. 17
Good Governance Standard for Pblic Services Good practice examples: taking informed, transparent decisions and managing risk It is helpfl to draw on the spport of an officer or independent adviser who can advise on legal isses and procedre, and who has the athority and stats to challenge governance practice if necessary. This works best where there are safegards and reporting relationships in place to make sre that advice is not easily ignored. A register of governors and exectives interests will make governing bodies and others aware of any real or perceived conflicts of interest and facilitate the exclsion of people with personal interests in a decision from inflencing or taking part in that decision. Docmenting all risks in a risk register, together with the risk score and the job title of the person responsible for ensring that the risk is managed, will help with risk management. The highest risks in the register can be given priority in review procedres to provide assrance on the effectiveness of risk responses. Gaining assrance that risk management arrangements are working effectively can be delegated to an adit committee or eqivalent body, where the size of the organisation makes this practical. Relevant work of internal adit, external adit, review agencies and inspectorates can be drawn on to provide assrance on the effectiveness of risk management. From time to time, governing bodies may decide to commission information from independent sorces, otside the exective, in order to spplement or validate information from the exective. 18
Good Governance Standard for Pblic Services 5. Good governance means developing the capacity and capability of the governing body to be effective Pblic service organisations need people with the right skills to direct and control them effectively. Governing bodies shold consider the skills that they need for their particlar sitation. To increase their chances of finding these people and to enrich governance deliberations by bringing together a grop of people with different backgronds governing bodies need to recrit governors from different parts of society. Pblic trst and confidence in governance will increase if governance is not only done well, bt is done by a diverse grop of people who reflect the commnity. Governance is also likely to be more effective and dynamic if new people with new ideas are appointed reglarly, bt this needs to be balanced with the need for stability to provide continity of knowledge and relationships. 5.1 Making sre that appointed and elected governors have the skills, knowledge and experience they need to perform well Governance roles and responsibilities are challenging and demanding, and governors need the right skills for their roles. In addition, governance is strengthened by the participation of people with many different types of knowledge and experience 16. Good governance means drawing on the largest possible pool of potential governors to recrit people with the necessary skills. Encoraging a wide range of people to apply for appointed positions or to stand for election will develop a membership that has a greater range of experience and knowledge. It will also help to increase the diversity of governors in terms of age, ethnic backgrond, social class and life experiences, gender and disability 17. Paying governors for their time may make participation in governance a practical option for more people and encorage a wider range of people to take part; it can also be a way of pblicly recognising the seriosness of governance responsibilities 18. 16 For example www.london.ed/tysonreport/tyson_report_jne_2003.pdf Tyson Report on the Recritment and Development of Non-Exective Directors, London Bsiness School, Jne 2003 (A report commissioned by the Department of Trade and Indstry following the pblication of the Higgs Review of the Role and Effectiveness of Non-Exective Directors in Janary 2003). 17 See, for example, A Simple Step Gide to Recritment, Office of the Commissioner for Pblic Appointments. 18 Approaches to paying governors are generally determined by statte and vary between types of organisation. For example, charities are generally prohibited from paying their governors (trstees). 19
Good Governance Standard for Pblic Services Application The governing body shold assess the skills that appointed governors need to flfil their fnctions. It shold appoint governors who have these skills, sing an open and skillsbased recritment process. A governing body with elected members shold commit itself to developing the skills that it has decided its members need, so that they can carry ot their roles more effectively. Where governing bodies are responsible for their own recritment processes, they shold establish an appointments committee and ensre that their recritment processes can identify and attract the types of people they want. Where an otside body makes appointments, it shold conslt the governing body abot the skills and experience it considers to be necessary or desirable in the new appointee. In these cases, the process shold inclde an independent assessor a person from otside the organisation who can advise on the sitability of candidates. Where other organisations nominate people to become governors, the governing body shold set ot clearly to the nominating body the set of skills and perspectives that wold be most helpfl. The governing body shold decide how to encorage more people, from a wider crosssection of society, to come forward as potential governors. This incldes reviewing the governor s role to make sre that: it is flfilling and coherent; it is feasible to do within the time and with the spport available; and it is sfficiently well nderstood by potential governors. The search for a more diverse membership of the governing body shold not be at the expense of a membership that has the necessary skills. 5.2 Developing the capability of people with governance responsibilities and evalating their performance, as individals and as a grop Governors need both skills and knowledge to do their jobs well. Skills need to be developed continally to improve performance in the fnctions of the governing body (see 2.1). The necessary skills inclde the ability to scrtinise and challenge information received from the exective, inclding skills in financial management and the ability to recognise when otside expert advice is needed. Knowledge also needs to be pdated reglarly to eqip governors for changing circmstances. An appraisal and performance review of individal governors demonstrates that their role and contribtion is important and valed and provides an opportnity for them to take stock of their own development needs. The governing body can improve its collective performance by taking the time to step back and consider its own effectiveness. 20
Good Governance Standard for Pblic Services Application New governors shold receive a thorogh indction that is tailored to their role in the organisation. All governors shold have opportnities to develop frther skills and to pdate their knowledge throghot their period of membership of the governing body, and shold take seriosly their responsibilities to identify and address their development needs. Individal governors shold be held to accont for their contribtion throgh reglar performance reviews. These shold inclde an assessment of any training or development needs. The governing body shold reglarly review its performance as a whole. The review shold involve assessing its ways of working and achievements and agreeing an action plan to pt in place any necessary improvements. 5.3 Striking a balance, in the membership of the governing body, between continity and renewal All governing bodies need continity in their membership, so that they can make the most of the pool of knowledge and nderstanding and the relationships that have been formed both inside and otside the organisation. It is also important that governing bodies are stimlated by fresh thinking and challenge and that they avoid lapsing into familiar patterns of thinking and behavior that may not best serve the organisation s prpose. However, trnover in membership that is too extensive or too freqent can mean that the organisation loses the benefit of longer-serving members learning and experience. Application The governing body shold decide how to strike the necessary balance, in its appointed membership, between continity in knowledge and relationships on the one hand, and renewal of thinking on the other. It shold explain the reasons for its policy. Where an otside body appoints governors, the governing body shold explain its preferred approach to continity and renewal. Options inclde fixed terms of membership or limits on the nmber of terms a governor can serve. Another option is to assess individal governors for their contining objectivity every time they are being considered for reappointment; independence of mind and the ability to take new approaches are endring characteristics of some individals. 21
Good Governance Standard for Pblic Services Good practice examples: developing the capacity and capability of the governing body to be effective Bodies that nominate governors for other organisations are advised to present more than one nominee for interview. People appointing governors to pblic service organisations cold consider what they might do to develop frther the pool of people interested in pblic service governance, and to develop the capability of potential governors who do not yet have the skills needed for the role. It is good practice to review continally the range of expertise needed on the governing body, so that any gaps can be filled when posts become vacant and when training and development plans are made. A skills adit of the members of a governing body is a sefl way of identifying their strengths and any skills gaps. The governing body can avoid over-dependence on a few individals by making sre that enogh governors have the critical skills. Indction for governors cold inclde an introdction to the local environment and the sector, the organisation s relationships with other bodies and the context for the organisation s strategy. It can be sefl to review a governor s needs for frther information or explanation six months or a year after his or her indction. Paying governors for their time (as well as meeting expenses) is controversial in some sectors. Considering the advantages and disadvantages can help organisations decide whether payment will strengthen the membership and performance of the governing body or ndermine its vales. By sharing specific responsibilities among its members on a rota basis, the governing body can ensre that important knowledge is not vested in one or a few individals. 22
Good Governance Standard for Pblic Services 6. Good governance means engaging stakeholders and making accontability real Governing bodies of pblic services have mltiple accontabilities: to the pblic (citizens) and to those who have the athority, and responsibility, to hold them to accont on the pblic s behalf. These inclde: commissioners of services, Parliament, ministers, government departments and reglators 19. Real accontability reqires a relationship and a dialoge. The Pblic Services Prodctivity Panel 20 said that accontability involves an agreed process for both giving an accont of yor actions and being held to accont; a systematic approach to pt that process into operation; and a focs on explicit reslts or otcomes. Real accontability is concerned not only with reporting on or discssing actions already completed, bt also with engaging with stakeholders to nderstand and respond to their views as the organisation plans and carries ot its activities. 6.1 Understanding formal and informal accontability relationships The range and strength of different accontability relationships varies for different types of governing bodies. For any governing body, some relationships will be, or will feel, more formal and possibly more important than others. For example, the board of a non-departmental pblic body is likely to have a closer and more direct relationship with a minister than a school wold have. However, the large majority of governing bodies need to be particlarly active in developing and maintaining a dialoge with the pblic. Governing bodies that are elected by the pblic (sch as local concils) have accontability relationships with central government that are less direct and less powerfl than, for example, the relationships that non-departmental pblic bodies have with central government. Bt even elected bodies are held to accont by central government and reglators for some responsibilities. This is why it is important for central government and reglators to facilitate good governance in the organisations they direct or hold to accont. Application The governing body shold make clear, to itself and to staff, to whom it is accontable and for what. It shold assess the extent to which each relationship serves its prpose, inclding whether any relationships need to be strengthened and whether any dominate to the detriment of serving the prpose of the organisation and being accontable to other stakeholders. If so, the governing body shold discss those tensions and work to fill any gaps in its accontability. It shold also raise any concerns with those organisations to which it is formally accontable and, where possible, try to negotiate a more balanced position. 19 Otside the pblic sector, accontability is not to citizens bt to their own stakeholders and to reglators acting in the pblic interest. 20 Accontability for Reslts, Pblic Services Prodctivity Panel, HM Treasry, 2002 23
Good Governance Standard for Pblic Services 6.2 Taking an active and planned approach to dialoge with and accontability to the pblic For elected governors, the manifesto and the ballot box are the fondation of the accontability relationship; bt good governance also reqires an ongoing dialoge between them and their electorate. Appointed governing bodies also have to develop an accontability relationship throgh dialoge. The fel of this dialoge is interest and confidence. If dialoge is to develop and contine, organisations need to encorage and maintain the interest and confidence of the pblic and service sers. Althogh these two grops overlap to a large extent in their relationship with pblic service organisations, the relationship with the pblic is one of accontability, whereas the relationship with service sers is one of consltation and responsiveness. Both grops are diverse, consisting of people with different characteristics and experiences and from many different backgronds. Approaches to developing a dialoge have to recognise these differences, so that the views of a fll range of people are heard. Confidence and interest can both be damaged easily, especially when things go wrong. The organisation s ability to respond to sch circmstances is also an important demonstration of its accontability. Application The governing body shold make it clear that the organisation as a whole seeks and welcomes feedback, and ensre that it responds qickly and responsibly to comment. Complaints are a vital and necessary part of feedback, and there shold be clear leadership within the governing body on handling and resolving them, and ensring the lessons learnt are sed to improve the service. The governing body shold ensre that the organisation has a clear policy on the types of isses on which it will conslt or engage the pblic and service sers, respectively. This policy shold clearly explain how the organisation will se this inpt in decision making and how it will feed these decisions back to the pblic and to service sers. The policy shold make sre that the organisation hears the views and experiences of people of all backgronds. Each year, the governing body shold pblish the organisation s prpose, strategy, plans and financial statements, as well as information abot the organisation s otcomes, achievements and the satisfaction of service sers in the previos period. 24 6.3 Taking an active and planned approach to responsibility to staff Staff are accontable to the governing body, bt the governing body also has serios responsibilities, as an employer, to the staff. Recriting, motivating and keeping staff are vital isses if pblic services are to be effective. The governing body needs to provide an environment in which staff can perform well and deliver effective services, by creating a cltre that welcomes ideas and sggestions, responds to staff views
Good Governance Standard for Pblic Services and explains decisions. The governing body is itself the last point of appeal for staff with complaints or concerns that they have not been able to deal with throgh the organisation s management strctres. Application The governing body shold have a clear policy on when and how it conslts and involves staff and their representatives in decision making. The governing body shold make sre that effective systems are in place to protect the rights of staff. It shold make sre that policies for whistle blowing, and spport for whistle blowers, are in place. 6.4 Engaging effectively with instittional stakeholders Instittional stakeholders are other organisations with which the organisation needs to work for formal accontability or to improve services and otcomes. Pblic services have a complex network of governance relationships involving lateral relationships between partners and hierarchical relationships between Parliament, central government and local organisations. Some of these are accontability relationships, while others are to do with working together to achieve better otcomes. Few pblic service organisations can achieve their intended otcomes throgh their own efforts alone. Relationships with other organisations are important, especially if they provide similar or related services or serve the same sers or commnities. Developing formal and informal partnerships may mean that organisations can se their resorces more effectively or offer their services in a different and, for service sers, more beneficial way. Application The governing body shold take the lead in forming and maintaining relationships with the leaders of other organisations, as a fondation for effective working relationships at operational levels. 25
Good Governance Standard for Pblic Services Good practice examples: engaging stakeholders and making accontability real It is good practice to assess the effectiveness of policy and arrangements for dialoge with service sers and accontability to the pblic, to evalate their impact on decisions and to decide what improvements may be needed. Organisations can se a range of models, from citizens jries to commnity time banks (mtal volnteering by members of the pblic, working alongside service providers to spport their neighbors), to promote pblic and ser involvement in pblic service design, delivery and evalation. It is good practice to pblish information on research into the pblic s views of the organisation and information on service sers views of the sitability and qality of the services they receive. It is important to inclde the diversity of the pblic and of service sers in this information, to give a complete and accrate pictre. The Independent Commission on Good Governance recommends that governing bodies assess the extent to which they are applying these principles of good governance, and report pblicly on this assessment, inclding an action plan for improvement where necessary. By organising systematic 360-degree feedback from a representative sample of stakeholders, governing bodies can gain valable insights abot the organisation s relationships. 26
Good Governance Standard for Pblic Services Appendix A: Assessment qestions for governors and governing bodies to ask themselves 1. Good governance means focsing on the organisation s prpose and on otcomes for citizens and sers How clear are we abot what we are trying to achieve as an organisation? Do we always have this at the front of or minds when we are planning or taking decisions? How well are we doing in achieving or intended otcomes? To what extent does the information that we have abot the qality of service for sers help s to make rigoros decisions abot improving qality? Do we receive reglar and comprehensive information on sers views of qality? How cold this information be improved? How effectively do we se this information when we are planning and taking decisions? To what extent does the information that we have on costs and performance help s to make rigoros decisions abot improving vale for money? How effectively do we se this information when we are planning and taking decisions? How well do we nderstand how the vale we provide compares with that of similar organisations? 2. Good governance means performing effectively in clearly defined fnctions and roles Do we all know what we are spposed to be doing? Is or approach to each of the governing body s main fnctions clearly set ot and nderstood by all in the governing body and the senior exective? What does the size and complexity of or organisation mean for the ways in which we approach each of the main fnctions of governance? How clearly have we defined the respective roles and responsibilities of the non-exectives and the exective, and of the chair and the chief exective? Do all members of the governing body take collective responsibility for the governing body s decisions? How well does the organisation nderstand the views of the pblic and service sers? Do we receive comprehensive and reliable information abot these views and do we se it in decision making? 27
Good Governance Standard for Pblic Services 3. Good governance means promoting vales for the whole organisation and demonstrating the vales of good governance throgh behavior What are the vales that we expect the staff to demonstrate in their behavior and actions? How well are these vales reflected in or approach to decision making? What more shold we do to ensre these vales gide or actions and those of staff? In what ways does or behavior, collectively as a governing body and individally as governors, show that we take or responsibilities to the organisation and its stakeholders very seriosly? Are there any ways in which or behavior might weaken the organisation s aims and vales? 4. Good governance means taking informed, transparent decisions and managing risk How well do or meetings work? What cold we do to make them more prodctive and do or bsiness more effectively? Have we formally agreed on the types of decisions that are delegated to the exective and those that are reserved for the governing body? Is this set ot in a clear and p-to-date statement? How effective is this as a gide to action for the governing body and the exective? How well do we explain the reasons for or decisions to all those who might be affected by them? Is the information we receive robst and objective? How cold the information we receive be improved to help improve or decision making? Do we take professional advice to inform and spport or decision making when it is sensible and appropriate to do so? How effective is the organisation s risk management system? How do we review whether this system is working effectively? Do we develop an action plan to correct any deficiencies in the systems? If so, do we pblish this each year? 5. Good governance means developing the capacity and capability of the governing body to be effective What skills have we decided that governors mst have to do their jobs effectively? How well does or recritment process identify people with the necessary skills and reach people from a wide cross-section of society? What more cold we do to make sre that becoming a governor is practical for as many people as possible? How effective are we at developing or skills and pdating or knowledge? How effective are or arrangements for reviewing the performance of individal governors? Do we pt into practice action plans for improving or performance as a governing body? 28
Good Governance Standard for Pblic Services What is or approach to finding a balance between continity of knowledge and renewal of thinking in the governing body? What are or reasons for this approach? Do we need to review it? 6. Good governance means engaging stakeholders and making accontability real Who are we accontable to and for what? How well does each of these accontability relationships work? Do we need to take steps to clarify or strengthen any relationships? Do we need to negotiate a shift in the balance between different accontability relationships? What is or policy on how the organisation shold conslt the pblic and service sers? Does it explain clearly the sorts of isses on which it will conslt which grops and how it will se the information it receives? Do we need to review this policy and its implementation? What is or policy on conslting and involving staff and their representatives in decision making? Is this commnicated clearly to staff? How well do we follow this in practice? How effective are systems within the organisation for protecting the rights of staff? Who are the instittional stakeholders that we need to have good relationships with? How do we organise orselves to take the lead in developing relationships with other organisations at the most senior level? Applying the good governance Standard To what extent does the Good Governance Standard for Pblic Services apply to or organisation, bearing in mind its type and size? Are we pholding and demonstrating the spirit and ethos of good governance that the Standard sets ot to captre? Do we have a process for reglarly reviewing or governance arrangements and practice against the Standard? What frther improvements do we need to make? Are we making pblic the reslts of or reviews and or plans for ftre improvements and are we inviting feedback from stakeholders and service sers? 29
Good Governance Standard for Pblic Services 30
Good Governance Standard for Pblic Services Appendix B: Qestions for members of the pblic and their representatives to ask if they want to assess and challenge standards of governance Organisations can also ask themselves these qestions if they want to test their openness and responsiveness to the pblic and their service sers. 1. Good governance means focsing on the organisation s prpose and on otcomes for citizens and service sers What is this organisation for? Can I easily find a clear explanation of what this organisation is doing? Can I easily find ot abot the qality of service provided to the pblic? What is being done to improve services? Can I easily find ot abot the organisation s fnding and how it spends its money? 2. Good governance means performing effectively in clearly defined fnctions and roles Who is in charge of the organisation? How are they elected or appointed? At the top of the organisation, who is responsible for what? 3. Good governance means promoting vales for the whole organisation and demonstrating the vales of good governance throgh behavior According to the organisation, what vales gide its work? Does it follow these vales in practice? What standards of behavior shold I expect? Do the senior people in the organisation pt these standards of behavior into practice? Do they pt into practice the Nolan principles for people in pblic life (selflessness, integrity, objectivity, accontability, openness, honesty and leadership)? 31
Good Governance Standard for Pblic Services 4. Good governance means taking informed, transparent decisions and managing risk Who is responsible for what kinds of decisions in the organisation? Can I easily find ot what decisions have been taken and the reasons for them? Are the decisions based on p-to-date and complete information and good advice? Does the organisation pblish a clear annal statement on the effectiveness of its risk management system? Does the organisation pblish a clear annal accont of how it makes sre that its policies are pt into practice? Is the statement reassring? How does it compare with my own experience? 5. Good governance means developing the capacity and capability of the governing body to be effective How does the organisation encorage people to get involved in rnning it? What spport does it provide for people who do get involved? How does the organisation make sre that all those rnning the organisation are doing a good job? 6. Good governance means engaging stakeholders and making accontability real Can I easily get information to answer all these qestions? Are there opportnities for me and other people to make or views known? Does the organisation pblish an annal report containing its acconts for the year? Are copies freely available? Is the content informative? How do I find ot what decisions were taken as a reslt of my and others opinions being asked for? Are there opportnities to qestion the people in charge abot their plans and decisions? Can I easily find ot how to complain and who to contact with sggestions for changes? 32