Agency management boards in practice (On the public sector)
In 2017, 31 government agencies and public enterprises had a management board. The board is the agency's top level of management and has full responsibility for all its activities. But how do management boards function and fulfil their work obligations in practice? Do management boards have the right conditions to enable them to take responsibility for agency activities? These are questions we investigated within the framework of this study.
The study is based on a questionnaire survey distributed to management board members and director-generals. We also conducted case studies at five agencies with a management board. In addition, we analysed the minutes and read documentation from management board meetings and also regulatory documents such as rules of procedure. We supplemented the case studies with interviews of people with long experience of working at agencies with a management board.
Chairperson plays central role in management board work
The chairperson of a management board plays an important role. The chairperson is often both very experienced and highly competent when it comes to the management of the agency. The chairperson's role is to lead discussions during meetings, ensure the board makes good use of the board members' various skills and competences, and try to reach consensus among the board before taking any decisions. Moreover, the role implies making decisions together with the director-general as regards what matters the board is to discuss. The degree of cooperation between the chairperson and director-general therefore has an impact on how well the management board is able to function.
Compensation for management board work affects the level of ambition
Our study shows that in general the members of management boards have a high level of skill and long experience. They are actively involved in management board work by taking part in board meetings and by reading relevant documentation prior to the meetings. However, they seldom ask for more information or initiate their own inspections of internal audits.
Most of the board members feel that the compensation they are given for their work is too low. In their opinion, the level of compensation is a signal from the government indicating how much effort they should put into board duties. We found that board members who have a higher level of compensation on average devote more time to board duties. Thus, low levels of compensation may make the board members less inclined to do extra work tasks for the management board. This means that the board members' extensive skills and experience could be utilised to a higher degree.
Management boards seldom decide what matters are to be discussed
At management board meetings, a lot of time is usually devoted to the matters that are to be decided by the board as stated in the Government Agencies Ordinance and the agency's rules of procedure. However, our survey shows that boards seldom have a well-structured discussion on what matters the board is to discuss or decide.
The internal audit is an important information channel for the board
The internal audit is the function at the agency from which the management board can request special information. However, not all agencies with a management board have an internal audit. Moreover, generally speaking, the internal audit function has limited resources and the management boards seldom request specific documents. Few agencies with a management board have functions or administrative resources other than the internal audit that are specifically at the disposal of the management board.
Management boards seldom meet heads of departments
The director-general plays a key role when it comes to informing the management board about agency activities. Also, the director-general is usually the person who informs the board about the political leaders' opinions about the agency and any specific information they want to give the agency.
Our study also shows that heads of department rarely meet the entire management board. It is true that the chair of the board takes part in discussions with the agency but it is usually the director-general who is in charge of the informal contacts. This can lead to the board being sidestepped regarding the management of the agency. When the director-general is given instructions from both the head of department and the management board, there is a risk of the agency having dual steering.
Management boards believe they can fulfil their work obligations and take responsibility for agency activities
The members of the boards feel they are well equipped to fulfil their work obligations and take responsibility for agency activities. As many as 90 percent of the board members feel they are very able or reasonably able to check that the activities conducted at the agency are reported in a reliable and correct way.
However, our study also shows that the boards are only able to take proper responsibility for the matters they have been informed about. There is a risk that the boards are not given all the information they need from both the agency and the government. In practice, this affects the boards' possibility of taking real responsibility even though from a formal point of view they do have full responsibility.