The recently published report into the appalling failings of the Mid Staffordshire NHS Foundation Trust brings the issue of organisational governance once more back into the spotlight.
Anyone who reads the report will see that it is not possible to blame these terrible events solely on ‘NHS administrators’ or ‘budget cuts’ but, in all probability, the mass of people (who will read the newspapers rather than the report itself) will come to just that conclusion. Clearly, health professionals and their working cultures had a large part to play in these serious events but, by and large, the media doesn’t like to criticise doctors and nurses when managers and directors are an easier target.
Nevertheless, it is obviously the case that ultimate responsibility for these events must rest with the board of the trust and this once again raises the question of what is wrong with health service governance arrangements that permit these failings to take place. However, it would be a mistake to assume that governance is just a problem in the NHS, since failures in governance can be identified in other parts of the public sector such as education and quangos.
We can go further and recognise that there have been severe governance failings in the private sector. I have often asked myself the question: ‘What were the non-executive directors of Lehman Brothers doing at the time of its collapse?’ They were either unaware of what was happening or they were aware but did nothing. Either way it seems a failure of governance. Also I did wonder at the time the Lloyds HBOS merger was announced, after brisk and emergency negotiations, whether the non-executive directors of either organisation had been consulted or had any idea what was happening.
Thirty-five years ago, in a devastating criticism of the ineffectiveness of non-executive directors of companies, the late Robert Townsend (the then boss of Avis) wrote a book entitled Up the Organisation. In relation to non-executive directors he made a number of irreverent comments such as:
- In all the years I spent on company boards I never heard a suggestion from a non-executive director that resulted in action.
- Non- executive directors meet once a month to gaze at window dressing, listen to the chief executive and his team talk superficially, ask a couple of dutiful questions, make token suggestions (courteously recorded, but subsequently ignored) and adjourn until next month.
- Non-executives are usually friends of the chief executive (or executive chairman) put there to keep him safely in office.
- Be sure to serve a heavy lunch and cocktails before the meeting so that some of the older directors will fall asleep.
While Townsend’s comments may be seen as extreme and designed to shock, they contain germs of truth that have applicability in the public sector. Clearly, the bulk of non-executive directors in the public sector are both committed and conscientious, but the key question is whether they are effective in terms of governance.
After 30 years experience of the public sector as a manager, academic, consultant, auditor and non-executive, I have observed a number of governance failures in many different sectors. In the light of this, I have come to one simple conclusion about organisational governance: no amount of guidance manuals, training courses, codes of practice, auditors, inquiries and regulatory bodies will compensate for the lack of non-executive directors with sufficient ‘nous’ and courage to ask difficult question and not be fobbed off by unsatisfactory replies or professional mystique.
The boards of public sector organisations (including NHS trusts) actually require a sufficient number of people prepared to make waves and rock the boat. It is not sufficient to just say: ‘We weren’t told’. This is not just my opinion. If you look at some catastrophic events that have taken place in the past, such as the Challenger Space Shuttle disaster, it is clear from investigations that the absence of people prepared to stand up and ask difficult questions was a major contributory factor to the incidents.
However, in the public sector we often find that the same people seem to pop up as non-executive directors in a number of public sector organisations. Such people are often referred to as being ‘sound’, which seems to imply that they won’t be controversial, ask difficult questions, upset people or embarrass the government. However, we must also recognise that non-executive directors have a tough job. They are often squeezed between an appointed chair and executive directors who want to keep their jobs and a government that wants no bad publicity. Not surprisingly, they don’t ask tough questions.
Is this what happened at Mid Staffordshire NHS Foundation Trust? If it is, we must question the methods by which non-executive directors and chairs are appointed and whether they are in need of review.
Malcolm Prowle is Professor of Business Performance at Nottingham Business School and a visiting professor at the Open University Business School. He can be contacted via his web page www.malcolmprowle.com
