Good governance is more important than ever, but this involves adapting to best fit the circumstances (internal, local and national). COVID-19 is the biggest single disruption to our society since World War II. We are aware of changes across the Scottish public sector of “governance-light”, “interim/emergency governance” and various suspensions of board and committee meetings. There is no definitive answer as to the proper response, but decisions made now will have shorter and longer term consequences.
Most organisations are facing unprecedented challenges, whether through user demand (e.g. first-line responders such as the NHS, councils and police services), through uncertainty of dealing with evolving central government direction and guidance, through impact on funding and ability to keep operations ticking over as sustainably as possible under some level of interruption. From a governance perspective, being clear and having key stakeholders fully focused on what your objectives are is crucial. It should be from this perspective that any modified governance arrangements are developed.
We have set out below some key questions, to support you in effective yet optimised governance. These can be used as prompt points for your organisation, to promote thinking, discussion and response.
- To what extent do you need to revise your strategy and objectives in light of COVID-19?
- Do your revised governance arrangements support your refined strategy? Broadly, the latter should lead the former (and not the other way about, as can be the case in practice), except in areas such as compliance and organisational probity.
- Does it optimise between oversight and challenge to keep NEDs reasonably sighted, yet allow the organisation to deal with the direct and immediate implications of the current crisis?
- Is it clear how the internal and external communication plan is to be deployed, to ensure clarity, consistency and confidence in messaging?
- To what extent have you considered revising your scheme of delegation, to empower quick and responsive decision making at the appropriate level? This may mean investing more power in a specific taskforce, in executives, and in middle management. This may go against your culture or mean accepting quicker but less well-informed decision making.
- If delegating more decision making, how is the Board being kept informed of activities?
- Are you making use of the cumulative expertise across your professional networks (e.g. speaking with similar bodies across your sector, including fellow Chairs, Executives and Board Secretaries)? Does this cover both effective governance processes and help inform your strategic response to the challenge?
- How are your revised arrangements balanced between immediate challenges and the longer-term implications (including future implications of decisions being taken now)? For example, too long a “suspension” of governance meetings and processes could result in issues for the medium and longer term.
- How have any revised governance arrangements been developed, consulted upon, and communicated to all internal stakeholders? How has any feedback been demonstrably evaluated?
- Have external stakeholders been appropriately consulted; Scottish Government/Sponsor Body, auditors, regulators, other key stakeholders?
- Are you open to and able to flex your interim arrangements, as things develop and either the internal or external context you are operating in changes?
- If your normal arrangements result in relatively long lead times for board and committee papers (e.g. one or two weeks), how reasonable is this when the timeliness of information is critical for the best scrutiny and decision making?
- What have you learned about your business continuity and disaster response arrangements? Are you taking steps to deal with immediate implications of this and noting improvement opportunities to pursue later?
- To what extent do your revised arrangements comply with the basic principles of good governance, and if not can you reasonably explain any deviations?
As the situation continues to develop, the likes of the Good Governance Institute may well be a useful bookmark to add to your browser.
Finally, remember that your Campbell Dallas advisors are always here to offer support to clients and never more so than now. Please get in touch with your usual engagement lead or manager to discuss any issues you are facing, whether ad-hoc advice is required, a sounding board, or a more formal partnership on any challenges to help inform your evolving arrangements.
We look forward to helping you work through your specific circumstances and tailor any advice to suit your unique context. As in all our work, we want to support effective decision making and best possible delivery of your outcomes.
The information in this blog should not be regarded as financial advice. This is based on our understanding on 11 May 2020. Laws and tax rules may change in the future.