An issue of governance

It was 20 years ago today that I was first appointed to sit on the board of directors of a government-controlled entity. That was Interprint Limited. During these 20 years, there have only been nine months (February to October 1998) when I did not hold an appointment to sit on the board of a government-controlled entity.

The appointments have included, apart from Interprint Limited, the Employment and Training Corporation, Malta International Airport plc, the Malta Development Corporation and related entities such as IPSE Limited, and now Air Malta plc.

Added to this experience of governance within the public sector, I have been involved in a number of assignments involving a number of areas within the public sector. I feel that this experience has given me a deep insight into the way the public service and the wider public sector operates and is governed and has also enabled me to draw my own comparisons between the private sector and the public sector.

My intention in this week's contribution is to be provocative - nothing bad since we are on the eve of the peak holiday week in Malta, and as such my thoughts may be considered as nothing more than summer follies. Even so apologies are offered to those taking offence.

An important starting point is the Public Administration Act, which seeks to introduce a greater element of empowerment and a greater sense of accountability within the public sector. As such it will tax heavily the managerial capabilities of the leaders within the public sector. It will also challenge such persons to refine their capabilities in policy development and strategic thinking. This Act represents a step in the right direction, if we are capable of exploiting it to the full. Could it be (please note the question form) that some members of senior management within the public sector do not like this Act because it will put them on the spot?

When talking with public servants, one is very often confronted with the view that their managerial problems are unique and are different from those in the private sector, because the public seems to have too much influence in the decision-making process and the way the public service operates, and because of what is termed as political interference. My retort to such comments is very often on the lines that it is only right that the public has a great deal of influence in the decision-making process; after all, they are the clients. This makes it no different from the private sector where the customer is considered as king and not the manager or the employee.

With regard to the issue of alleged political interference, my retort is that even in private sector organisations, there is a great deal of politics - not party politics but organisational politics. Thus my conclusion is that the managerial problems of the public service often arise from the fact that it is a very large organisation. A global company that employs 30,000 persons all too often faces the same problems. Unfortunately what has happened is that not enough attention has been given within the public sector to organisational and human resources development and we are suffering the consequences now.

Could it be (and note the question form even in this case) that it may be very convenient for some persons in managerial positions within the public sector not to distinguish between vision setting, policy making, decision-making and implementation, and where their responsibilities lie within each area? Another issue that arises is the autonomy or otherwise that government-controlled entities, which form part of the public sector, but not of the public service, should have. This is an issue that has always worried me. The perception of employees and management within such entities has invariably been that they are different to public servants (employees of government departments) and should therefore earn more money, should have more authority, should not be accountable to any permanent secretary or director, and should not be burdened with any rules that apply to the public service, especially when it comes to money spending.

I do not know who was responsible for the creation of such a perception. However, for many years the need to have an arms' length relationship between the public service and such government-controlled entities, which also enabled the involvement of persons coming from the private sector, was interpreted as a carte blanche to do away with any form of accountability. There is now a very significant effort being put in to introduce a stronger sense of accountability in financial matters. I feel it is working, but those responsible for this task are not very popular people within government-controlled entities.

One common experience that I have had in every entity where I was involved, was to manage to reduce expenditure. It may be that I am nothing more than a very mean, miserly person. I would like to believe that I am a cost conscious person and that one of the fundamentals of good leadership is to eliminate waste. In the private sector, waste leads to companies going bust. Why should the public sector be any different?

The most frustrating aspect that I have had to experience within the public sector is the widespread belief (which is a very wrong one) that the chairman of a government-controlled entity is all-powerful and can dictate what should or should not be done. There is a similar belief about ministers. The truth is that like every other organisation, the person at the top does not control anything and is certainly not the boss, irrespective of what anyone else may think. We need to accept that it is humanly impossible for a minister to control everything that happens within the remit of his ministry.

Ministers are dispensable (thank goodness for that many will exclaim), in that they come and go; so are board directors. The public servants and the employees of government-controlled entities stay there permanently.

Could it be (and please note the question form once again) that we are running the risk of a dictatorship by the public sector in this country, that is public servants and employees in government-controlled entities determine what goes or does not go in this country, irrespective of government policy, because their job is a permanent one? I know this is a nasty question, but I feel that it should not be dismissed outright.

What we are talking about is the governance of this country. We have a set of laws enacted by Parliament, and the public sector is essentially responsible for the application of those laws, be it in a regulatory role, be it in the role of a provider of services. This all happens within the context of a programme of government, which is meant to have a vision and a policy framework.

The way these laws are applied will determine the way the governance of the country happens. The impact of good governance is sustained economic growth, increased social cohesion, and a better quality of life. I feel we still have not addressed fully the way the governance of this country is to happen, and I am not sure it is the fault of politicians.