The importance of public confidence in our institutions – public and private – goes without saying. However, with the recent spate of corporate collapses, people have become sceptical of business practices and the credibility of their so called ‘watchdogs’. Similarly, in the public arena, people have every right to be questioning who is actually calling the tune. Did George W Bush and Tony Blair (with John Howard in cohorts) mislead us about Iraq’s nuclear capacity or was it their spin doctors and advisers, misleading them to achieve a desired outcome?
Speaking at Western Australia’s Local Government Week Conference, noted US author and expert on Corporate Governance, Dr John Carver, said that at both the corporate level (with their Boards of Directors and CEOs/managers), and the governance level (with elected representatives and public servants/Council managers) there is too much blurring of respective roles. He asserts that worldwide there is much room for improvement in the way both business and Government operate.
Directing his comments to the elected representatives rather than the Council managers in the audience, Dr Carver said that it is not very helpful to look at the corporate world to see how to run things. He suggests that the problems with business have probably always existed, but of late have become too big to hide.
He said at municipal level the key is for elected members to avoid becoming involved in the day to day management of Council’s activities: this should be left to the CEO and his or her staff.
With Local Government, the Council owners (residents) are, almost always, also its customers. In the corporate world, the owners (shareholders) are less likely to be customers. He told Councillors that if a resident approaches them as a ‘customer’, concerned about service delivery, then this is not their concern but a matter for Council managers to sort out. But when a resident is acting as an ‘owner’, expressing an opinion about the long term or strategic direction of Council, then this is a legitimate concern for elected members to take on board.
Put simply, Councillors are responsible for governing the running of the organisation but not the actual running of Council. Understanding this difference is vital, but Dr Carver added that governance is not a natural act, it requires the learning of new skills.
In responding to questions following his address, he agreed that many people are elected to Council on a single or a few related issues. ‘Once the leaky tap has been fixed’ the next step is how to move on to the big picture of setting out strategic parameters, then handing responsibility to the CEO and staff to get the job done. But this does not mean walking away: Council must stipulate clear performance targets and monitor these rigorously and fairly.
He also emphasised the fact that all power lies with the Council as a whole. Once it makes a decision and delegates power to the CEO, the staff through the CEO is answerable only to the Council and not individual Councillors.
In challenging Councillors to be bold and innovative, that superior governance is about values, vision and governing for future generations rather than simply acting as caretakers, Dr Carver rightly points out that it is important for elected members to not forget they were citizens before they were Councillors, and will be long afterwards.
