Tom Ferris is a Consultant Economist specialising in Better Regulation. He was formerly the Department of Transport’s Senior Economist.

Have your say on Corporate Governance in Government Departments

The Department of Public Expenditure and Reform is currently engaged in a consultation process on corporate governance standards for Government Departments.  An open invitation has been issued for people to give their views on the draft framework. Submissions should be made to no later than 26 June 2015. When finalised, this framework will codify, for the first time, the principles of corporate governance in Government departments.

What is corporate governance?

Put simply, corporate governance is the system of rules, practices and processes by which a Department is directed and controlled. At the launch of the draft framework, Minister Brendan Howlin said that

“Good governance is central to the effective operation of a Department, and is vitally important in the effective discharge of their obligations.  This Standard will ensure that Departments put in place the relevant structures, processes, and polices to deliver on these obligations”.

The fundamental objective of good governance is to ensure that Departments achieve their intended outcomes while acting in the public interest at all times. The draft framework sets out the high-level principles that should underpin the governance arrangements in civil and public service organisations. These are reproduced below:

Good Governance

      …supports a culture and ethos which ensures behaviour with integrity, a strong commitment to ethical values, and respect for the rule of law.

…ensures openness, effective public consultation processes and comprehensive engagement with domestic and international stakeholders.

…helps to define priorities and outcomes in terms of sustainable economic and societal benefits and to determine the policies and interventions necessary to optimise the achievement of these priorities and outcomes.

…means developing the Department’s capacity, including the capability of the leadership team, management and staff.

…means managing risks and performance through robust internal control systems and effective performance management practices.

…means implementing good practices in transparency, reporting, communications, audit and scrutiny to deliver effective accountability.


Why a governance standard now?

It is important that the civil service operates in a business-like way in such an increasingly complex, uncertain and unpredictable world. In previous times, the traditional values of the civil service may have been sufficient. Sean Cromien, former Secretary of the Department of Finance made this point in a speech in March 1992, when he said

“… traditionalists might regard a full written code of conduct with some degree of suspicion because our tradition is seen as resting on the all-pervasive influence of asset of values rather than on the imposition of a number of rules”.

He went on to conclude that

“…if only to reassure the public that proper standards are being maintained, we will need in future to have more of our code written down”.

Nearly a quarter of a century later, the demands of a modern economy and the increasingly educated and sophisticated electorate require much greater openness and accountability in all Departments.

What is in the draft standard?

The draft standard runs to forty-five pages. It is in two parts: Part 1 sets out a summary of good governance principles; these are supported in Part 2, which sets out an adaptable governance framework, including provisions to be used in documenting each Department’s own arrangements. It focuses on references to key areas of governance, points to sources of more detailed guidance and includes within the appendices key governance documents addressing assurance, compliance, planning and oversight arrangements.

The draft standard recognises that a “one size fits all” approach is not appropriate, as Departments are not uniform in their structure, size, functions, locations etc, and therefore must make pragmatic decisions against a core governance framework to reflect their own responsibilities and circumstances. However, the draft standard does recognise that a common approach on certain core governance issues must exist across Departments. They will be required to document and publish their governance arrangements, in accordance with the principles set out in the draft standard. Moreover, corporate governance measures must stay within the framework of constitutional and statutory provisions, and comply with the statutory provisions in the Ministers and Secretaries Acts 1924 to 2013, the Civil Service Regulation Acts 1956 to 2005, the Public Service Management Act 1997, and Comptroller and Auditor General Acts 1866 to 1998.

Is the draft standard wholly new?

The draft standard is not wholly new. It encompasses a number of documents that already relate to individual areas of corporate governance in the civil service. Examples are the Cabinet Handbook, the Public Financal Procedures (the blue book), the Civil Service Code of Standards and Behaviour, and the recommendations of the Report of the Working Group on the Accountability of Secretaries General and Accounting Officers (i.e. the ‘Mullarkey Report’). Much of the content of the draft standard will be familiar to those working in, or with, central Government departments. Moreover, the draft standard states that

“nothing in this Standard is intended to disturb the existing roles, responsibilities and accountabilities of Ministers, Secretaries General, Accounting Officers, and Departments”.

Existing administrative and legislative provisions, applying to a Department on matters that are also the subject of this Standard, continue to apply; for example, Strategy Statements, Performance Budgeting etc. The Standard, when it is finalised, will provide the framework for good corporate governance. But the real test is the extent to which civil servants in Government Departments commit themselves to the corporate governance requirements in performing their specific duties and collectively committing to good governance across their Departments.

Further, those seeking to lobby Government need to be aware of the corporate governance requirements that officials have to comply with. The guidelines published, and the invitation for submissions, will be an invaluable tool for lobbyists.

PAI will be running a flagship conference on the Regulation of Lobbying Act 2015 on June 25. It will be held in the Westin Hotel, Dublin 2. Speakers include Brendan Howlin TD, Minister for Public Expenditure and Reform, Mr. Justice Daniel O’Keeffe, Chairman of Standards in Public Office Commission and Ms. Sherry Perreault, the newly-appointed Head of Lobbying Regulation in Ireland. For more information and to see the full agenda, see here. To book your place, click here or call us on 01 819 9500.