The fish rots from head
Currently in council we are working to update the CEO’s key performance indicators (KPIs). Every good organisation has KPIs for its CEO and managers that reflect key strategic priorities, are measurable and attainable. But what about the board of directors? More specifically, what about those elected to direct the council?
These thoughts come from many sources, including an excellent book, The Fish Rots from the Head, by Bob Garratt, which focuses on the corporate board’s responsibilities, its performance, and seeks to build more effective boards. Garratt says the root cause of the loss of power of many boards is their surrender to executives. He advocates the board should be the fulcrum of business performance.
The board’s job is all to do with creating momentum, movement, improvement and direction for the organisation. He also advocates developing a learning board and learning organisation where mistakes are not hidden but are an important part of learning; a learning culture around policy formation, strategic planning and all operational business units.
The UK code on corporate governance lists many principles, but I’ve picked out some specific to the council:
“There should be a clear division of responsibilities at the head of the company between running of the board and the executive responsibility from the running of the company’s business; no one individual should have unfettered powers of decision; the board should include a balance… such that no individual or small group of individuals can dominate the board’s decisionmaking; the board should be supplied in a timely manner with information in a form and of a quality appropriate for it to discharge its duties; the board should undertake a formal and rigorous annual evaluation of its own performance, and that of its committees and individual directors.”
It is very clear how these same principles are applicable to the council. The board of directors is generally appointed through a selection process that evaluates their experience and skills. Councillors are elected directly ‘from the wild’. If anything, local government, and central government for that matter, needs to be even more vigilant in regard to improving its overall governance.
Local Government NZ recognises this, and is leading a number of very good initiatives in this regard.
As elected members we have collective responsibility: we set the vision, values, strategy and culture. As part of the FNDC’s planned governance processes we will be seeking to put KPIs on ourselves as elected members.
In Ma¯ori mythology the North Island is the fish. The head may be Wellington, but the Far North is the tail. The driving force comes from the tail: collectively we can push for better local governance and set the example for local government in New Zealand.
"Local government needs to be even more vigilant in regard to improving its overall governance."