A crisis in governance: impetus to better economic and social performance?

By Danny Davis

May 29, 2018

What do the explosive corporate governance failures exposed by the Royal Commission, the APRA report on CBA, and AMP’s shocking executive behaviours tell us about the future of leadership in the public service?

My doctoral research at La Trobe University suggests it tells us a lot. The research describes how taking a multi-outcome approach helps leaders deal with the complexities of managing modern organisations. The research has identified materially better outcomes are being achieved where staff, management and executive get to make their everyday decisions in the context of long-term multi-outcome ‘information foresight’.

A finding that will surprise many people is that with the right governance, more innovation can be achieved at lower risk and lower cost. By integrating mature risk management and systemic risk oversight into everyday behaviour alongside other disciplines, organisations experienced fewer, smaller failures (seen as learning), faster replanning and drastically reduced wastage of time, effort and money.

The leading performers were found to have governance practices that accessed innovative visualisations, that were able to rely on consistent quality information-turned-to-knowledge incorporating the up-to-date thinking of experts from across the wider team. And, their governance framing allowed their leadership to keep their agile action, experimentation and learning optimised towards the greatest strategic value.

The good news is that this holistic approach guides us to be healthier, wealthier and better performing organisations – focusing on long-term sustained value-creation deliberatively balancing limited resource across many complex outcomes.

Helping public sector leaders

One Australian jurisdiction’s central agency is investigating the impact this new thinking could have on its leadership capacity. Starting from the top, they have been looking at how a value-creation model could “provide actionable guidance to enhance the Secretaries Board’s capacity to lead, oversight, engage, prioritise and lift the rate of sustained effective value-creation – across public and community sectors – and across economic and social outcomes”.

This comes as the forthcoming APS Review begins to consider how the public sector deals with the increasing complexity of the modern world. A multi-objective, value approach to governance offers a powerful opportunity to move away from the traditional levers of training and restructure?

Public and community engagement

A recently published paper shows this approach, applied as Enhanced Stewardship in the public and community sector, within organisations, sectors and across public networks.

“A finding that will surprise many people is that with the right governance, more innovation can be achieved at lower risk and lower cost.”

Successful roundtable discussion forums at Parliament of Victoria have focused on Enhancing Investor Performance and Enhancing Corporate Performance. The report from the seminar is here. The “Breaking the Deadlock” title for the series was contributed by Tim Wilson MP, as it seemed to offer a pathway to overcome a gridlock of policy, special interests, failure-to-change, media cycles and short-termism.

For those interested in exploring the application of this thinking to the public sector, two further roundtables are scheduled: Enhancing Public and Community Performance at Parliament of NSW, next Monday 4 June and Enhancing Australia’s Economic Performance at Parliament House Canberra, 18 June.

The roundtable forums are open to the public and free to attend.

Danny Davis is Executive Director of the Australian Institute of Performance Sciences

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