May 4, 2021
For the last two decades, governance has taken a back seat to innovation. As technology giants have assumed nation status with adolescent attitudes, as nation states have quietly eroded the checks and balances on power, we have been persuaded that ethical small print – the structures, appointments, systems of accountability – is a form of a drudgery from a bygone age. But now we are a world reckoning with the failings of the ‘move fast and break things’ era: a global ‘infodemic’ of mis/disinformation, civic surveillance and exponential volumes of hateful content all now routine fare across Facebook-owned platforms alone. To say nothing of the ravages of global pandemic.
Slowly, slowly, then, a new mood is taking shape as former architects of this age turn their hand to systems of governance fit to constrain their creations. Facebook’s new “Oversight Board” – a 20-member group often referred to as “Facebook’s Supreme Court” (still, it should be noted, a wildly un-transparent venture) – is shortly due to decide whether to ban Donald Trump permanently from the platform. More ambitious reform comes from The EU – a consistent forerunner in tech legislation – which has this week unveiled a revolutionary framework which risk-ranks AI technologies as unacceptable (e.g. facial recognition software), high (e.g. school scoring systems) or limited (e.g. chatbots).
But it will also escape no one’s notice that nation states have their own house to put in order. In these efforts, tech nations and governments both would do well to look to the practices of responsible governance created by the impact investment industry, which knows that the ethical small-print is the safeguard of long-term returns (and is now enshrined in Time’s External Rate of Return impact measurement system).
And so it was a great privilege last month to unveil the outcomes of our recent work with the Cabinet Office to develop new principles for the governance of public bodies, including all Departments of State, non-departmental public bodies and quasi-autonomous non-governmental organisations.
Some years ago, I did some work on the difference in the duties and responsibilities of directors of private companies and directors of public bodies. It was striking that I was one of very few people who had served on both. Following my participation in the Triennial Review of the Big Lottery Fund and its governance a few years ago, I conducted a comparative analysis between the governance of private companies and public bodies where it became apparent that the latter had more general and often vague requirements when it came to the role of directors.
As set out by the Institute of Directors (IoD), Non-Executive Directors (NED) are appointed to the boards of organisations to bring independence and impartiality, their wide experience, specialist knowledge and personal qualities.
The new principles I have developed go beyond the “Nolan principles” of public life and set out a recommended 12 essential qualities for NEDs. These principles represent an important progression in public body governance.
They underscore the core duty and function of the NED: to maintain independence from the executive and fulfil their duty as objective observer of the organisation: someone who is there to advise from the outside looking in. This has never been more critical to ensure that our public bodies are fully and efficiently regulated – both for their and the public’s greater good.
They also maximise a NED’s value. A NED brings many things to the table, but high amongst them is their invaluable expertise. When sharing this unique knowledge, the NED must act with the best interests of the organisation in mind. As a body that is linked to public services, the advice given must therefore be in line with public interests and with the intention of furthering public good. Moreover, the expertise is to be used as a vehicle to serve the broader mission and duties of the sponsoring Secretary of State and their Department. This will allow the objectives of the organisation to remain on the same path as those of the governmental department with which they are aligned. Finally, the expertise of the NED should be utilised to enable compliance with the statutory duties of the organisation, once again ensuring that organisational mission and vision act in line with public interest and the goals of the relevant government department.
The NED should also help the organisation flourish. This means support in its clearest sense, allowing management to feel heard and valued and creating a culture of diverse thought and experience. As a public body, the organisation should reflect the public it serves.
Together, these principles reconnect our semi-public administrative bodies to the Departments of State to ensure a complete alignment of vision and mission – ultimately driving much greater efficiency across the civil service and the state overall, and improving outcomes for all citizens.