The role of the board in uncertain times | Roundtable summary

A group of senior NEDs across government departments, arm’s-length bodies, not-for-profits and private sector organisations got together to discuss the role of the board in uncertain times. The key discussion points were:

  • The role of the Government boards
  • Risk mitigation/management
  • Individual expertise, collective strength
  • Goals and objectives for meaningful change
  • The value of networks and collaboration

An overview of the role of the Government boards

The discussion started by outlining the role of the board in government departments – there are 90 NEDs across all of the Government departments, and these boards oversee proper governance, act as a sounding board, as a critical friend and offer expertise and a focus on supporting strategy development. Ultimately Ministers remain responsible for their department, but NEDs play an important role in decision-making and appropriate challenge.

Risk mitigation/management

The main topic of discussion was the role of the board in change, and society has seen some huge change in the last three years. COVID-19, the war in Ukraine, the rise of AI, changes to international stability, environmental issues, and the need to move to net zero all feature heavily as agenda items on most boards.

As part of managing change, all boards need to think about risk management, and it is true to say that the Government has been catching up with the private sector in the way that it manages and processes risk. It was discussed that risk appetite is easier to manage in a private sector organisation, but the governance around risk management in terms of sub committees, similar processes and agendas has been changing in government to reflect that of more commercial boards.

The question was posed as to how you move to genuine risk mitigation in these circumstances, and how do you define risk appetite to do this. Low frequency, high impact risk was discussed and the fact that ultimately most things rest with government decisions. Government also faces a lot of crises, which take a lot of time, and in fact one of the critical roles of the board is to help define what is not a crisis – as well as what is a crisis, and in the context of sometimes political heavy weather.

Individual expertise, collective strength

Ultimately it was agreed that there needs to be confidence in the board to ensure that they are able to help support the organisation through a crisis. The board should be made up of individuals with strong voices from diverse and varied backgrounds. Strong organisations run crisis management scenarios as boards to ensure that they have clarity on the process, who gets notified and when, what parameters are for update vs decisions and how does the communication chain work. Lessons learnt are a useful exercise here and can lead to ensuring that the terms of reference are fit for purpose.

Agility of decision-making and time are also factors to consider for boards. Privately owned organisations are able to make decisions more quickly than listed companies and government departments. However, recognition of the need to bolster individual expertise is also important to these boards and the advisory board route is often taken to get strong independent advice to ensure that enough outward challenge is being made. This raised the important question of how you maintain support and constructive tension. Good boards need to be approachable enough to ensure that correct information is being fed up, but also that challenge and constructive tension is also there for good governance.

Goals and objectives for meaningful change

There was discussion on the fact that the climate crisis is an existential crisis that most organisations are struggling to address on their own. There was discussion about how there could be a model for large corporations whereby they have an advisory board of experts that keeps them honest regarding climate goals and objectives and helps ensure that meaningful change happens.

Could this be a model that is rolled out more widely? Whatever happens it was agreed around the table that systemic thinking is critically important, and that organisations, government and not-for-profits all know each other, understand what each other does, and ultimately shares this challenge with each other.

This led to the discussion as to whether departments are able to have a long-term strategy (given the political context) which is SMART, with outcomes defined and key measures of success. This helps boards focus and ensure that the right information is being presented and monitored. NEDs can help departments do this in different ways and therefore add real value.

The value of networks and collaboration

The value of networks and collaboration cannot be understated and it was acknowledged that this is where WIG can play a vital role. The management programme that the Cabinet Office used to run was excellent for building networks (WIG runs Exchange which does a similar thing) as if you didn’t know the answer you would be able to ask someone else in your network who did. Big businesses are experts at doing this and it really does pay dividends in terms of getting things done. When this is done well with government departments it really does work well, eg looking at the outcomes, working cross departmentally, pooling the best influence, setting aside the need to be the partner leading it and making sure that all posts are joined up. How can NEDs influence more to achieve this?

Ultimately, well networked boards can really help the executive – both from their advice on the board and also internally with the operations in terms of actions as coaches, mentors and experts. They should also be independent enough to promote the joining up of government departments where possible.

It was discussed that government departments are vertical and therefore it is sometimes challenging to get things done, but also that organisations should not rely on government alone to do the important things -  there is a need for businesses to really help drive change as well.

There was discussion about the size and complexity of organisations really changing the way that crisis management is viewed by boards: some smaller organisations were really negatively affected by government policy in COVID-19 because the crisis varied for each organisation. Ultimately, if the business continuity crisis plan has been invoked then clearly the organisation is in crisis.

If organisations were able to join up more to look at horizon scanning, take the longer-term view and investment, then we would as a society be able to get more done. We need to be talking more about who is going to deliver it, which government agencies will be involved, and ensuring that systemic issues are being looked at on a multi-agency basis. Independent advisors can play a key role in ensuring that we don’t continue to get bogged down in the detail. This should also be done on a national and international level.

Conclusion

The conversation finished on a positive note. It was agreed that that this might be a time when engaging with government could be more productive and that solutions to complex problems can be looked at together, including strategic thinking on how investment can push Britain forward.  It was agreed that businesses should not assume that they can leave it to government to address challenges alone, and we can all work on playing our part. Ultimately this could lead to better business, better government and better society.

Part of WIG’s charitable purpose is to help organisations ensure that they have the right board composition, utilising individual expertise, cross-sector knowledge and collective strength. We would be delighted to discuss our services in more detail should it be of interest. 

Learn more: NED and Trustee Recruitment. 

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