Nobody is breath-taken with surprise now when governance issues are (routinely and perennially) on the agenda for the board, and neither they should be. With all the governance debate for the last two or three decades, leaders have no excuse on this – it’s a thing to have good governance, no doubt about it. And after all that careful attention for decades, we all know what it is, what it looks like, and how we do that ’round here, right?
Well maybe, maybe not.
Just as putting “latte art” on the top of your coffee suggests that the barista is competent, but is no guarantee, having the trappings of governance is no guarantee that actual practice will prove to demonstrate good governance. The proof of the coffee is in the drinking and just so with governance – the results in reality are what count.
Since it is a whole bunch harder to taste test governance, various recent news stories should have our rapt attention as they show that governance systems assumed to be robust proved to provide rather thin gruel at best, and in others tasted really quite sour.
What these news stories show is that, just as we never know the mix of training and practice that any given barista might employ to make our coffee, the role of law and custom in governance is something of a mystery in forming the fabric of governance. We can provide any number of suitable systems and frameworks, but do they sum to conduct of people that is what we would hope?
Think, for a moment, about how we are accustomed to looking across the geopolitical landscape and seeing many mature and seemingly well-functioning democracies around the world – assumed to be so from careful attention to robust legal arrangements demonstrating how that democracy works. However, recent years are replete with examples to the contrary, where individuals might have coloured between the lines provided by the law, but were able to wriggle around such constraints nonetheless. In other words, the relevant community turned out to be unwittingly reliant on custom/practice (shown in the choices of individuals following established habit of others before them) rather more than law (the formally codified rules by which a community regulates such conduct).
The result was gaps between custom and law that showed, the hard way, that some democracies might be rather less well-functioning than we imagined or assumed, because an episode of conduct plunged into that gap.
On this, today we are our own best example. On behalf of the Australian community, the report released from the work of Virginia Bell, former justice of the High Court of Australia, addresses some of the adventures of Scott Morrison in appointing himself – secretly and using prime ministerial powers – to multiple ministries.
Her findings show that the law may well have been followed, but the surrounding custom (including that of publicising ministerial appointments, for a key example) has, in effect, been playing a rather important role in preventing the slips betwixt cup and lip.
The nub of the matter is that even without breaking the law, the conduct involved remains a very long way from doing the right thing:
Given that the Parliament was not informed of any of the appointments, it was unable to hold Mr Morrison to account in his capacity as minister administering any of these five departments. As the Solicitor-General concluded, the principles of responsible government were “fundamentally undermined” because Mr Morrison was not “responsible” to the Parliament, and through the Parliament to the electors, for the departments he was appointed to administer.Hon Virginia Bell AC, Report of Inquiry into the Appointment of the Former Prime Minister to Administer Multiple Departments
One might argue “no harm no foul” – as boards are wont to say when they have a lucky escape in their own work. The provable negative consequences from Scott Morrison’s conduct were few, because, ultimately, he mostly did not exercise the powers that he had unilaterally granted to himself. So, one view is that even if he tested the limits of prime ministerial discretion, what harm really came of that?
If you take an interest in such things, it would also be possible to take some comfort from rather more spectacular shortfalls that did have significant consequences. You might say, well what happened was nowhere near as bad as when:
- Donald Trump tested the limits on whether he should leave office when voted out; or
- Boris Johnson tested the limits on whether he should follow the rules that he had, himself, established on ministerial conduct, or COVID-times conduct, and then whether he should account for his own related conduct.
If you prefer an institutional example, rather than a political one, you might look no further than organisations which have been placed on the wrong side of history when questioned by the Royal Commission on institutions and abuse of children. Here, of course, the consequences are now very much a public scandal. Secret governance processes proved to be horribly inadequate, particularly in failing to protect those who so very much deserved and needed protection. (If you appreciate a wider angle on this, there are also implications that arise much further afield and for an almost limitless variety of organisations – the UN, for example).
But, in any of these cases, the more conscionable approach is – so what if there were no negative consequences? Is that really the only question? So, in today’s example of the secret appointments, even if there was no legally-enforceable obligation that had been abrogated by Scott Morrison – does that make the action that he took okay?
We strongly suggest not.
We would instead suggest that consequences in any of these cases were incidental. The profound issue was, instead, that the governance system – political or institutional – actually proved not to work in the way that it was (widely) supposed to, and did not prove able to do the thing that it was purported to do (in the secret appointments, for example, protecting the public interest for the overall democracy of Australia).
Legality alone is a relatively low bar when it comes to doing the right thing, and let’s not forget that good governance is about doing, and being seen to do, the right thing.
Other action, or failure to act, is corrosive of the trust that is lifeblood for a system of communal endeavour, whether that is in an entire democratic state or an individual organisation (of any size, from the UN all the way to the local golf club).
Further, it is as well to keep in mind that testing the limits of legality, as the secret appointments were seen to do (albeit staying just inside the lines), is a dangerous path to tread. The Australian public still has not heard the end of the story on another matter of legality appending to decisions involving Scott Morrison, where those lines proved to have been crossed in spectacularly bad fashion – that of the so-called Robodebt scheme. Legal cases already concluded on Robodebt have cost the Australian public billions, consequent upon the wide array of egregious damage done to individuals and their lives. All that is now also the subject of a Royal Commission which has already shown that legality is at issue – it will be fascinating to see where that ends sometime in 2023, and particularly whether Westminster system customs, such as expecting the public service to be independent of partisan politics, might prove to be more important than law in obtaining appropriate outcomes.
All this should give pause to leadership in organisations on a fairly broad front. In the vernacular, brief reflection on the Bell report would suggest a light go on – a very dark amber light, maybe even a red one – for every board conscious of doing the right thing.
So to the extent that your organisation’s good governance relies, in part, on a shared understanding of “how we do things round here”, be aware that over-reliance on what one supposes is a shared understanding of such things is prey to some structural problems – not least that:
- The ideas may not actually be shared – in retrospect, for example, if it had been visible what churches did to respond to complaints about abusive clergy, would their members have agreed and supported that approach? Unlikely.
- Even if the ideas are shared at a point in time, can it be assumed that that remains true and fair over time? Ditto, unlikely – and the more diverse that community becomes the more unlikely that assumption would be to reflect reality.
- Important steps that make governance work well might not be protected by an enforceable obligation, but rely on office-holders “doing the right thing”. Will they always do so? Again, unlikely – and we owe those whom we lead to work with that more realistic assumption.
The learning for boards is that arrangements for board decision-making might well suffer from similar risks, without that ever showing up in a risk assessment.
Accordingly, boards would do well to take a breath and reflect on implications (such as those noted by Virginia Bell) of these episodes as part of the annual cycle of governance thinking. For example, even if you can do a thing, should you? And if, on due reflection, you think you should, when does maintaining confidentiality morph into unduly working in secret?
So we might think that we have a well-functioning set of arrangements for ensuring good governance, but have we? Have we probed into the workings enough, have we asked “why?” enough to really be confident on this? How do we test those arrangements? What would a worked example demonstrate about the actual quality of outcome from a governance test?
Even as you taste-test your next “latte-art” topped coffee, good food for thought, eh?