Non-execs must try harder if they are to prove their worth

19 August 2015 -

Non-executive directors have made a great contribution to Whitehall life, but there’s more to do, writes Lord Browne.

John Browne

Since 2010, non-executive directors (Neds) have shared our experiences as leaders of large private sector and not-for-profit organisations, and worked with enhanced departmental boards to improve policy delivery.

When I was asked to lead the creation of enhanced departmental boards, one senior person told me the idea was ridiculous and that I was crazy for taking it up. But, four years later, it is clear to me that Neds have made an important contribution to the way in which government departments operate.

Although governments are quick to formulate policies, they have a poor track record when it comes to delivering them. The Blair, Brown and Cameron administrations have all struggled to find ways to turn well-intentioned ideas into well-delivered projects.

The wrong targets or misapplied incentives, for example, can create pressure on time and resources without delivering better-quality outcomes. Great delivery and, therefore, great policy require a capable team, financial support and, in particular, a clear and agreed purpose. The best businesses excel at these things.

In the last two years, Neds have devoted particular attention to improving the capability of boards and departments; major projects and procurement; and management information. The capability of boards and departments has greatly improved.

There has also been significant progress in the leadership and management of major projects. And when it comes to management information, decision-making has been enhanced by the introduction of consistent benchmarking across Whitehall. These successes have given credibility to this new model of governing. Early cynicism about Neds’ presence has faded, and enhanced departmental boards have now become an established part of governance.

But further improvement is required. In 2012, I gave us two out of 10 for progress. Last year, I scored us six.

When I took on my role I aspired to perfection, but I now realise that was unrealistic. The work of government is far more ragged than the work of business, and boards will never reach a perfect 10. I think the limit is probably seven – so six is not bad.

Further improvement will rely on a number of things happening.

First, engagement with boards at all levels must improve. This is particularly relevant for junior ministers, who have had the lowest attendance at boards. Junior ministers are an integral part of the delivery process and could also be the future leaders of departments, so boards must engage with them effectively.

Second, I think there is more work needed to improve the management of talent. This will require a change in attitude from the leaders of departments. Many senior civil servants – just like chief executives in the private sector – say that people are their most important asset, which means they should be spending their most important time in their working days assessing and developing those people, rather than five stolen minutes at the end of the day. In my experience, few devote the quality time required.

The third area of focus should be the role played by boards and non-executives in the identification and management of risk. Governments have not been good at evaluating risk across the organisation. Historically, less than a third of major projects have been delivered on time and on budget. In particular, projects that reach a certain risk threshold should automatically require board approval.

The real test of boards will be whether they continue to have an impact on how policy is implemented in the long term. The new parliament will change departmental priorities, making it clearer whether there has been a permanent shift in the way that ministers and the civil service interact to deliver policy.