Sources of Ineffective Governance in the Canadian Public Sector
Bryan Shane and Patricia Lafferty
Vol. 38, Issue 1, Mar 2008
To maximize the contribution of government programs in achieving their departmental missions, there is a need to enhance the effectiveness and expediency of decision making throughout the public sector at both departmental and branch levels.
Governance is the process whereby organizations make important decisions and render account. The goal of an effective governance regime is to ensure that all initiatives are managed from an organization -wide perspective and that they contribute to the organizationâ€™s strategic business goals.1 A good governance regime results in well-informed and strategic decisions and leads to:
- Eliminating duplication of effort and overlap of initiatives across the organization in developing solutions that are needed by all core business lines. The effective implementation of this process can save 10-20 percent (either through direct cost savings or cost avoidance) in both the capital and operational budgets for large departments.
- Improving transparency and streamlined decision making by ensuring governance is visible, understood, accepted and supported throughout the department
- Improving quality and timely service to clients.
- An appropriate process for discussing and resolving issues related to specific initiatives both at headquarters and in the regions.
- Identifying business opportunities, their benefits, risks and impacts on the organization.
- A structure and process for supporting the implementation and updating of the department business plan.
- Streamlining the process of defining requirements, obtaining approvals and developing/implementing effective solutions for initiatives and projects. In short, it can reduce the timeline associated with making decisions and implementing important department wide initiatives.
- Ensuring that the change process associated with the implementation of new initiatives is well managed, so that change occurs smoothly with minimal disruption to sector operations.
- Establishing standards, policies and guidelines for program branches that conform to those of the department.
Too often, current practices in the federal government limit governance to a definition of structure, i.e., committees and membership. There is little consideration or attention given to what the structure is designed to achieve, the foundation upon which decisions will be rendered, the manner in which decisions will be communicated and evaluation of the net results of decisions taken.
The issues interfering with effective governance
- Many departments and branches have no stated or formal governance principles that establish a code of conduct for making decisions at either the departmental or branch levels. As a result, there can be a competitive stance among the players, often making decisions that serve specific interests rather than those of the department as a whole. Cooperative behaviour may be seen as a loss of power instead of a means to empower the department as a whole. Synergy in terms of cooperation, decision making, and the sharing of resources tends to be mandated at the deputy level rather than viewed as a normal business practice. This perspective is a reflection of a tradition of independent strategic business units rather than a strong synergistic whole.
- Governance principles help to establish the framework and the doctrine that will govern behaviour in the exercise of the governance process. Stated and agreed to governance principles outline the norms through which all stakeholders make crucial governance decisions and ensure that the governance process is accountable, transparent and based on declared organizational values.
Decision making within the public sector is heavily dependent upon committees. Committees are used to advance official government policy, to determine the best means of doing so and are often charged with determining the changes that must be implemented in order to ensure the effective and efficient running of the bureaucracy. However, the structure of these committees, their membership, mandates, authorities and linkages are often poorly articulated and rarely completely understood either among the branches within a department.
The current governance structure in many departments and branches demonstrates the following:
- Not all committees have terms of reference (TOR) and those that do are generally not complete, fully articulated or follow the same template.
- In general, members of the committee do not review and commit to the duties and responsibilities as laid out in their own terms of reference. Further, there are rarely any mechanisms in place to ensure that each committee understands its impact on other committees with which they interface
- The roles and responsibilities of the committee and its members are rarely articulated and communicated to the rest of the department in a meaningful and appropriate manner.
- The relationships between committees is neither clearly documented nor communicated in terms of how the various parts work together for all key stakeholders.
- The focus of most committees is on information sharing rather than on decision making. This usually results in poor attendance on the part of senior officials as the committee is deemed to be an ineffective use of time in a calendar where time is a scarce commodity. As a result, delegated members are asked to attend who often do not have the authority to make a decision and who are unaware of the larger implications of items on the agenda. Hence information sharing becomes the only activity that the committee is comfortable with.
- It is difficult to determine if the committees have the delegated power to make decisions. Many committees rely upon the chair and his/her delegated authority to make whatever decisions are required. This type of decision making is dangerous as there is a tendency in the public sector to acquiesce to the senior official rather than to present alternative information or solutions.
- Senior committees are generally linked to each other through common memberships rather than through formal information sharing communication practices. The sharing of information then throughout the organization is very much dependent on the management style of the individual. Some will be very effective communicators, others less so. This informal process can give rise to misunderstandings, ineffectiveness and inefficiencies.
- Attendance at the committee meeting is oft times problematic with the attendance of many who are not members, or who are peripheral to the items under discussion. This circumstance tends to retard the operation of committee procedures.
- Often times there are simply far too many committee meetings. These drain the valuable and expensive time of senior executives without providing value for their attendance. The focus on information sharing and lack of decision making tends to result in committee members being disinterested in attending and a tendency to send junior persons as replacements.
- Committees, their terms of reference and membership are rarely reviewed once the committee is struck. Further, assessment of value for time spent in committee is even rarer.
- The production of meaningful records of decision (RD) that can be read and interpreted accurately by a large audience is frequently missing. Often, the phrase used to refer to any RD is â€œItâ€™s on the web,â€ somewhat akin to stating that the item for review is in the library â€“ just how to identify it and then find it are known to only a few. This results in the committee generally relying on individual members and personal management style for communication into the organization, which can result in decisions being presented through individual filters. More seriously, some decisions may not be communicated at all.
- The secretariat of a committee plays an important role in ensuring the efficacy and efficiency of the committee meeting to be conducted. Generally, secretariats prepare agenda, gather and distribute pertinent documentation to committee members, provide the secretary role during the meeting, prepare minutes and follow up on all actions. However, there is no common role definition for all secretariats to subscribe. Again the duties of the secretariat are rarely defined and depend on individual management style and preference. This makes some more effective than others and can add an additional burden to committee members.
An effective governance process at the branch and departmental level is one that is: defined, documented, clearly understood by those who actively participate in it, generally understood by the organization at large, and is repeatable to ensure that the appropriate initiatives are managed from a department wide perspective.2 Further an effective governance process ensures that all initiatives are aligned and contribute to the departmental vision and mission. Unfortunately such is not generally the case within the federal public service as demonstrated by the following:
- Often there is no formal, defined, documented and repeatable decision making process (governance) process that is followed to ensure all major initiatives are managed from a department wide perspective. If such a process does exist, it will not be widely understood throughout the entire organization. At best, the most governance processes are ad hoc and better appreciated, known and understood at the senior management levels only.
- The decision making (governance) process is neither transparent nor consistently applied. It also fails time after time to identify opportunities for the application or sharing of department wide best practices.
- Too often there is limited accountability and delegated decision making authority within the governance process. The horizontal accountability within committees is usually deferred to the vertical authority of the branches to which the committee members report. There is little balance between the exercised delegated authority of committees and the direct reporting authority of committee members to their own organizations. Avoidance of risk is the primary method of operation and true delegated authority is seldom exercised.
- Context for departmental or branch decision making may often be lacking. In many organizations, a departmental business plan to provide a framework for decision making to support a cooperative and long term view is lacking. Without this strategic direction, decisions are based on branch-specific needs. As a result, decisions made do not support a balance between the whole organization and the individual parts of the organization. Decisions that should be viewed as corporate in nature with a shared accountability for achieving the strategic direction are often missing. Current decision making tends to be viewed as favouring one branch over another or as a loss of authority rather than from the point of view of shared accountability.
- The lack of effective performance measurement information further retards the effectiveness of the governance or decision making process. Without effective and balanced performance information from a financial, service delivery, client/stakeholder or employee viewpoints, the organization is unable to reward achievement or deal productively with the ongoing issues interfering the achievement of their strategic objectives.
- The efficiency of the governance process is limited and often does not make strategic use of the senior management committees. As was mentioned previously, but worth repeating, committee decisions are often delayed for a number of reasons:
- the balance of committee operations is too often focused on information sharing rather than decision making;
- committees have too many members peripheral to its core business and meetings are not managed or optimized to make best use of the valuable time of senior executives;
- committee members constantly refer back to their home organizations for authority to make any kind of committee commitment. As well, committee members are represented by junior staff members who must refer back to their organization before making any type of commitment; and
- the supporting documentation needed to make a funding or policy decision is often incomplete and requires repeated redrafting before being deemed acceptable
- There are few, if any, timing guidelines for the completion of the various stages of the governance process from the time a strategic initiative or proposal is introduced until a decision is rendered.
- The ad doc nature of current governance processes severely limits a departmentâ€™s ability to identify department wide cost saving opportunities or to determine opportunities for improvement.
- Governance and its attendant processes are not static. Many existing governance processes, even though they may be informal, have not been assessed or modified for some time. As a consequence, there is no formal review to ensure that the current structures and processes are both applicable and meaningful given the current circumstances.
- Supporting documentation with sufficient information to allow strategic decision making of any kind, i.e., decisions regarding investment proposals, policy proposals or other strategic initiatives, is often missing or not completed according to a standard format with appropriate guidelines. The supporting documentation that is provided does not universally provide all the information needed to allow management committees to make informed decisions. This results in proposals being returned to lower level committees or to the originating organization to provide the necessary information. For example, investment proposals do not routinely define the following elements: background or context, goals and objectives, option identification, cost scenarios, risk analysis, option analysis and selection. Having to send proposals back to sub-committees effectively wastes the senior executivesâ€™ time, delays decision making, further denigrates the importance and effectiveness of the committee and causes greater inefficiencies in the organization.
Governance inclusion/exclusion criteria
Inclusion criteria exist to assist all stakeholders in branches or departments to determine which initiatives should be managed from a branch point of view (vertical decision making) and which should be managed from a departmental point of view (horizontal decision making). These criteria provide a clear understanding of which authorities apply to their own branches and which must be subject to a formal and auditable departmental governance process. Exclusion criteria determine which initiatives are not subject to the departmental governance process, and require immediate attention. Within the governance process mutually supportive inclusion and exclusion criteria keep the process manageable and efficient.
- Implementing the inclusion process on an ongoing basis requires that clear criteria related to the overall organization and/or its component parts be made public to provide the guidelines as to when a new initiative should be subject to vertical or horizontal decision making. It is rare to find definitive statements of inclusion criteria in any governance process in the public sector.
- There are times when a decision is required of such immediacy that it must be fast-tracked or bypass the normal governance process. This process demands that clear criteria be defined to determine which circumstances will be exempt from the governance process. Such initiatives require immediate attention of senior management and cannot be left to a normal decision making process consisting of many steps over an extended period of time. Exclusion criteria streamline the process of making urgent and important decisions by outlining the exceptions to the governance process. As with inclusion criteria, few organizations have defined exclusion criteria.
Governance evaluation criteria
Departmental management cannot be all things for all branch needs and interests. Sufficient resources do not exist. Therefore, it becomes increasingly important for management to be able to say â€˜noâ€™ to some requests and requirements to enable â€˜yesâ€™ to have meaning. This means that objective and meaningful criteria must exist and be communicated so that all departmental branches understand how resources will be committed and to enable adjustments based on changing circumstances. These criteria provide a transparent and impartial means of deciding upon which initiatives, or funding proposals merit being approved in relation to others. Specific stated evaluation criteria will become of increasing importance with the implementation of transforming services for Canadians and in a shared systems environment. Sets of evaluation criteria that provide an impartial, transparent and fair means of deciding upon the value or merit of competing initiatives or investment proposals rarely exist in any governance process.
In order to maximize the contribution of the branches in achieving the departmental mission and vision, there is a need to enhance the effectiveness and expediency of decision making through a more effective governance regime at the branch and departmental levels.
1 IM/IT Governance Framework, B Shane, P Lafferty, T Beasley: Optimum, Journal of Public Sector Management vol 23 No: 2/3, 1999.
2 The Development and Implementation of an IM/IT Governance Framework: Bryan Shane & Patricia Lafferty, Optimum Online, Journal of Public sector Management. Vol.30, Issue 3, April 2001.