Boardization and Corporate Governance in the UK as a Response to Depoliticization and Failing Accountability
| Date | 01 October 2007 |
| Published date | 01 October 2007 |
| DOI | 10.1177/0952076707081589 |
| Author | Stephen Wilks |
| Subject Matter | Articles |
© Public Policy and Administration
SAGE Publications Ltd
Los Angeles, London, New Delhi
and Singapore
0952-0767
200710 22(4) 443–460
Boardization and Corporate
Governance in the UK as a
Response to Depoliticization
and Failing Accountability
Stephen Wilks
University of Exeter, UK
Abstract
Administrative leadership in UK central government has been reformed
through the creation of boards in all departments and agencies. This
‘boardization’ is modelled on principles of private sector corporate governance
and is a civil service designed response to the administrative implications of
depoliticization. It raises issues of political accountability and adaptation of
private sector models to the public sector and therefore poses a challenge to the
UK Whitehall model. Boardization has been variously implemented across
accounting units of central government involving the negotiation of a variety of
public sector bargains. It highlights a de-synchronization of administrative and
political reforms but provides a potential for boards to become alternative
locations for governance and accountability. The article registers concerns
about the suitability of reform based on private sector corporate governance
and identifies new research agendas.
Keywords
accountability, boardization, civil service, governance, Parliament
1. Introduction
Boards of directors are a central element in private sector corporate governance.
There has been a remarkable and under-researched trend also to reproduce the
board of directors in British central government. Every accounting unit of central
government now has a board although they vary in composition, nomenclature
and influence. Fully developed examples are found in non-ministerial departments
but, in all cases, boards are being explicitly encouraged to reproduce private
DOI: 10.1177/0952076707081589
Stephen Wilks, Professor of Politics, University of Exeter, Department of Politics,
Amory Building, Rennes Drive, Exeter, Devon EX4 4RJ, UK. [S.R.M.Wilks@exeter.ac.uk]
443
Public Policy and Administration 22(4)
sector organization, financial control and normative frameworks. This process can
be termed ‘boardization’.
While administration through boards has a venerable pedigree in British
government the distinctive feature of contemporary boardization is reliance on
private sector models. The resort to boards is analysed as the counterpart to the
fragmentation of UK administration, which is variously theorized as the hollow-
ing out of the state, distributed public governance, or agency delegation (Flinders,
2004; Thatcher and Stone Sweet, 2002). This aspect of state restructuring under
Labour has stimulated a body of research focussed on ‘depoliticization’, con-
cerned with the motives for, and effects of, transferring governmental activities
away from direct control by politicians. As a contribution to the debate on depoliti-
cization this article analyses the leadership and management of bodies granted a
high level of autonomy. It argues that delegation has prompted a search for
alternative models of governance and accountability operating at the level of the
individual agency. In a path-dependent process the reformist influence of the new
public management has lead senior civil servants to turn to private sector models
and to reproduce the corporate governance arrangements developed for UK listed
companies.
The creation of boards in departments, agencies and non-departmental public
bodies (NDPBs) establishes a significant and systematic level of governance with-
in the public sector that is capable of acting as a location of accountability as
an alternative to ministerial accountability. Hence, it is argued, boardization
emphasizes the disjuncture between administrative reform and managerial
accountability on the one hand, and the persistent expectations of Parliamentary
control and ministerial responsibility on the other. Boardization is inconsistent
with the Whitehall model and has the potential radically to alter power relations.
The article is doubtful about the merits of corporate governance that will tend
to reinforce managerialism. But at present the reforms are still in progress, the
position is fluid and in some ways experimental so the article ends with the identi-
fication of choices about whether constitutional reform is necessary to redefine the
Whitehall model or, alternatively, whether politicians will rethink the level of
delegation and seek to reassert political control, as has happened in Australia and
Holland (Howard and Seth-Purdie, 2005; Van Theil, 2006: 131). Although this
article is restricted to the UK, equivalent boardization reforms have been seen in
several countries and Australia, in particular, is further along this cycle of reform
(Bartos, 2005; Halligan and Horrigan, 2005). Nonetheless, this area is seriously
under-researched and this article is intended as a preface to further research on the
spread of boards in British central government, their impact and implications for
policy making and accountability. Section 2 deals with the theoretical framework
of depoliticization, Section 3 outlines the civil service corporate governance
innovations while Section 4 analyses the suitability of transferring corporate
governance principles from the private to the public sector. Section 5 draws
conclusions.
444
Wilks: Boardization and Corporate Governance in the UK
2. Depoliticization and Accountability: Escaping the Whitehall
Model
Since Labour came to power in 1997 a number of autonomous agencies have been
created on the Bank of England model of legislatively independent boards.
Further, across the whole of Whitehall, in executive agencies, NDPBs and minis-
terial departments, every accounting unit has created or adapted boards. These
boards take ownership of the mission, approve strategy and undertake corporate
governance functions through an apparatus of financial scrutiny, performance
monitoring and risk assessment involving the chief executive, finance director and
non-executive directors (NEDs). This can be seen as further stage of administra-
tive reform inspired by ‘the new public management’ (NPM). Yet management in
the public sector has always had a tentative nature prompted by awareness that the
public sector is not market driven, and by the political imperatives of ultimate
responsibility to democratically elected ministers and to Parliament. A paradox of
accountability has bedevilled public managers and their political masters. Should
managers have autonomy to pursue clearly defined goals over a sensible time
frame, or should they respond to the immediate preferences of a political leader-
ship? There are significant pressures towards the former goal of creating greater
managerial independence or ‘managerialism’ (Clarke and Newman, 1997). But
there are also powerful pressures pushing towards political intervention and the
rapid development of policies by politicians, this could be termed ‘politicization’.
The traditional British civil service coped with this tension through the ‘Whitehall
model’ in which civil servants administered within a dispassionate public service
ethic in response to party-political preferences.
A crisis in the Whitehall model was anticipated by Campbell and Wilson (1995)
in their interrogatively titled The End of Whitehall: Death of a Paradigm? They
identified a breakdown in executive leadership and put particular emphasis on the
corrosion of the concept of ministerial responsibility arguing that the concept is
central to the health of British democracy but that it is ‘in tatters’ (Campbell and
Wilson, 1995: 313–14). In part they attributed this to a breakdown in the tacit
understandings between ministers and civil servants arguing that ‘at the heart of
the Whitehall model is a bargain between bureaucrats and politicians which serves
both their interests’ (Campbell and Wilson, 1995: 33). Boardization is assessed
against this context of a failing but symbolically powerful Whitehall model of
political accountability. Boards may represent an ingenious institutional adapta-
tion that provides an alternative structure and culture of accountability. The
argument developed later suggests that a set of institutional pressures that are con-
genial to an evolving civil service, combined with a ministerial preference for a
degree of depoliticization, has encouraged the creation of formalized, legitimized
boards as alternative locations of leadership and accountability.
Depoliticization provides a structural interpretation of the changed relationship
between political control and managerial autonomy. In a valuable conceptual
445
Public Policy and Administration 22(4)
discussion Flinders and Buller (2006) point out, first, that depoliticization does not
purport to argue that ‘politics’ is taken out of administration, only that representa-
tive politics is excluded. Second, that governing elites (including the Labour
Government) ‘have explicitly stated their principled commitment to depoliticiza-
tion’ (Flinders and Buller, 2006: 20). Third, that depoliticization takes a number of
forms; they analyse institutional, rules based and preference-shaping variants.
They define depoliticization as ‘the range of tools, mechanisms and institutions
through which politicians can attempt to move to an indirect governing relation-
ship and/or seek to persuade the demos that they can no longer reasonably be
held responsible for a certain issue, policy field or specific decision’ (Flinders
and Buller, 2006: 4) and in so doing they point to an...
To continue reading
Request your trial