1. Public Bodies Governance Conference 8 March 2013 Performance and risk: keeping your finger on the pulse!

2.  Good Governance Standard for Public Services “Good governance means focusing on the organisation’s purpose and on outcomes for citizens and service users”  Three key elements Clear statement of purpose and intended outcomes Shared understanding and effective communication Regular review by the board of its decisions to ensure that they further the organisation’s purposes and deliver key outcomes for citizens and users  “One of the main failings of boards” Do you have clarity of purpose?

3.  Key performance indicators and quality indicators Clear statement of purpose A set of linked corporate objectives A few key performance and quality indicators  Common problems Too many (“a blizzard of information”) Failure to link KPIs and QIs to the major risks Focusing on quantitative over qualitative Are you measuring the right things?

4.  Board needs to engage with the executive to specify its information needs Format, content and frequency Does this information give us added assurance? “We were kept in the dark!” Are you getting the right information?

5.  Boards and committees need to satisfy themselves that the information that they receive is accurate The audit committee needs to be on top of its game! Scrutiny function of non-executives and sometimes the need to see hard evidence Role of internal audit and the relationship between the head of internal audit and the chair of the audit committee A healthy degree of scepticism Can you trust the information that you receive?

6.  Do you have the skills?  Do you offer a constructive challenge? Does the board understand its role? Is the chair effective? Has complacency set in?  Is there too much trust in the executive team or is the balance right? Culture and traditional way things have been done! Do you use the information provided to scrutinise effectively?

7.  Setting out your expectations to management  Formal scheme of delegation and a schedule of decisions reserved to the board Any matters of financial or reputational risk or material issues of principle to be referred to the board Test how well the scheme of delegation is working  Other sources of assurance Staff, users, public Triangulation How do you know when things have gone [badly] wrong?

8.  Ensure that an effective senior management team is in place  Hold senior executives to account for performance Role of the remuneration committee A good performance management system  Recognise good performance but be prepared to deal with poor performance Have you got the right executive team in place to deliver?

9.  Take decisive action to address problems “The major challenges being reported to the board today are the same ones that were being reported two years ago”  Be prepared to take tough and unpopular decisions Your decisions should be evidence-based Take tough decisions but be prepared to explain why How do you react when things go wrong?

10.  “Only good news from …….” Be careful to send out the right messages to staff Acknowledge problems and mistakes to Minister and public  Do you really want to be the best? “The drive to be the best undoubtedly put the senior management team under pressure to meet and exceed targets….” Do not give management a reason to conceal issues from the board Is there integrity in your performance reporting?

11.  Good Governance Standard Do you have organisational values and are they being put into practice at all levels? And….. how do you know?  The board should ensure that a set of shared organisational values: Are developed Are operating Are periodically tested, breaches are highlighted and dealt with How do you ensure pressure to deliver does not result in bad behaviours?

12.  Clarity of purpose and a focus on delivering key outcomes for citizens and users  Monitoring/measuring the right things  Getting the right information  Trusting the information you are receiving  Scrutiny: Using the information to hold the executive effectively to account for performance In summary

13.  Ensuring that you know when something has gone badly wrong (even when nobody wants to tell you)  Having the right executive team in place to deliver  Dealing with problems when they occur  Reporting honestly on performance – good and bad  Ensuring that the pressure to deliver does not drive bad behaviours In summary