The Swedish Agency for Public Management

The managerial structures of public agencies – a survey and analysis (2014:4)

On behalf of the government, Statskontoret has surveyed the managerial structures of the public agencies and analysed on what grounds the managerial structures is selected and how the different managerial structures influence and are applied in the steering of the agencies.

Many different forms of managerial structures, but the director-general governed agency dominates

Statskontoret's survey shows that the number of managerial structures is significantly more than the three that are regulated under the Government Agencies Ordinance. Of the 370 surveyed agencies, there are only 218 that fall under any of the three managerial structures in the Government Agencies Ordinance.

Among the agencies covered by the Government Agencies Ordinance's provisions on managerial structures, it is the director-general governed agency that clearly dominates. 131 of 218 agencies are headed by a single director-general. In 93 of these agencies, the government has decided to establish an advisory council. Furthermore, there are 32 board agencies and 55 council agencies. A comparison with how it looked in January 2008 shows that no major changes have taken place over time in terms of the allocation of agencies with different managerial structures.

The survey also reveals that it is relatively common to have specific decision-making bodies in the agencies. In total there are 97 specific decision-making bodies spread across 51 agencies. The position of the specific decision-making bodies in the agency is often unclear. Only in a third of cases is the distribution of responsibilities between decision-making bodies and agencies regulated in the the agency's ordinance with instructions.

The choice of managerial structure not a priority

According to the Public Management Bill, the nature of the activities, their political priorities and the government's need of steering should be the starting points for the choice of managerial structure. Statskontoret's analysis of the reasons for the choice of managerial structure shows that the choice almost always also can be said to observe these starting points. However, this largely depends on the starting points being so widely formulated that it is possible to find support for several different managerial structures for the same agency.

How developed the reasoning for the choice of managerial structures varies, but overall the managerial structure appears to be a less important issue for the Government and Government Offices. As long as there are no special circumstances, the director-general governed agency is generally selected and as long as no problems occur, the managerial structure is not reviewed. However, there is no consensus on the purpose of the various managerial structures and, consequently, about which agencies should have which managerial structure. This means that agencies with similar activities may well have different forms of governance.

Greater importance to the agency than the government

Statskontoret's analysis of how the managerial structures influence and can be applied in the steering of the agencies shows that the Government uses managerial structures of limited extentas a strategic control instrument. Overall, the steering of the board agencies does not differ significantly from the steering of director-general governed agencies. Board agencies have not generally been given greater strategic freedom than director-general governed agencies. Whatever managerial structure, it is the director-general that the Government and Government Offices have their regular liaison with.

If the managerial structure plays a minor role in how the Government works and the agency's overall room for manoeuvre, it has a greater significance for the agency internally. A board can, for example, play a valuable role both in terms of reviewing the administration of the agency and when it comes to making difficult or uncomfortable agency decisions. Similarly, the director-general governed agencies' advisory councils are often much appreciated by the head of the agency. Meanwhile, there is still considerable uncertainty about the role that both boards and advisory councils are really going to play in the management and steering of the agency.

Questions for continued development

Statskontoret's investigation indicates that, to some extent, there has been an adopted routine in the selection and application of the managerial structures. Even though the managerial structure has its limitations as a policy instrument, according to Statskontoret there are reasons to use the potential for the more effective steering of the agencies that nevertheless exists.

Statskontoret sees no need for any fundamental change to the current managerial structures or of more precise and steering rules for how the managerial structures should be selected and applied in the steering process. The challenge for the Government and ministries is instead about clarifying and communicating in various respects how the managerial structures that are already in place and should be applied in the steering process.

Based on the survey and the analysis, Statskontoret indicates a number of areas that we believe are important for the continued development of the managerial structures as policy instruments.

The board's commission is essential for benefits

One of the Statskontoret's conclusions is that there seems to be a lack of political support for a development where the board agencies are given a lot of freedom to manage their own affairs and make their own strategic decisions.

However, the survey has demonstrated that even without extensive delegation to the agency, the board can fill a valuable function for both the Government and the relevant agency. However, to increase the usefulness of the managerial structure, the board should be given a clear mandate that is perceived as important and relevant to both the Government and the Government Offices of the executive management and the board itself. Statskontoret's survey shows that if the board lacks a clear commission with the associated mandate, it is liable to be infringed.

The actual role and responsibilities of the agency boards should be clarified

In the board agencies, the board has full responsibility for the agency's activities in relation to the Government. Meanwhile, it is the director-general that manages the ongoing operations and therefore has initial contact with Government Offices. It is also with the director-general that the Government mainly demands responsibility.

That the Government in this way steers the agencies in the same way regardless of the managerial structure creates confusion about the roles and responsibilities of the board. The common analogy of corporate boards also leads to unrealistic expectations of what the board's work means and consequently to disappointment and frustration.

According to Statskontoret, the Government should partly clarify the limits within which an agency board can actually operate and communicate this to all stakeholders, and partly develop ways for the ongoing steering of agencies to be consistent with these allocations of responsibility. It is then not primarily about all contacts with the agency going through the board, which seems to be both cumbersome and unrealistic, but above all about finding ways of communication that work for the ministry, the board and the executive management.

The Government should consider the need for and purpose of advisory councils

The director-general governed agencies with advisory councils have become the most common managerial structure and can be described as something of a standard model for agency management. However, the reasons for establishing an advisory council are often quite vague, as are the notions of what the advisory council should do.

According to Statskontoret, the Government should consider whether all agencies that currently have an advisory council should maintain it, especially considering that each director-general has the option of establishing the consultative bodies that he/she deems necessary. It takes time and resources to establish and maintain an advisory council and the benefits of the council should therefore be weighed against the cost.

To increase the benefits of the advisory councils, Statskontoret believes the Government should also consider refining the purpose of each council and then let this purpose define the composition of the council. If the purpose is primarily to ensure the transparency of certain groups and/or ensure that agency management receives feedback and understands perspectives that might otherwise be missed, it is reasonable that it is not the same members that serve on the council as compared to if the purpose is primarily to provide advice and support to agency director-general. If the purpose of the advisory council is solely to provide advice and support, this should primarily be left to the director-general to put together a council of this type.

The participation of members of parliament in advisory councils is questionable

Our survey shows that there are many politicians on advisory councils. However, their presence in the councils is not uncontroversial. Members of parliament are principally criticised for participating on advisory councils. Among other things, some representatives for the agencies believe that the presence of members of parliament may inhibit open discussion in the councils. Director-Generals may feel reluctant to address certain issues at the advisory council for fear that the information could be exploited politically.

The composition of advisory councils indicates at the same time that the Government believes it is important with the representation of members of parliament and their insight into the agencies. Statskontoret still feels that it is questionable whether advisory councils are the most appropriate form of parliamentary transparency in the agencies.

The responsibility of the decision-making bodies should be regulated

There are no regulations for special decision-making bodies in the Government Agencies Ordinance. It has therefore not been determined how responsibilities should be allocated between decision-making bodies and the agencies.

According to Statskontoret, the responsibilities that decision-making bodies actually have in relation to the agency to which they operate and in relation to the Government should be clearly stated. This can be done in the Government Agencies Ordinance, or for each of the bodies in the relevant agency's ordinance.