| Review of: | The Governance of Public and Non-Profit Organisations: What do boards do? edited by Chris Cornforth |
|---|---|
| Reviewed By: | Ken Coghill |
| Reviewed in: | Australian Journal of Public Administration |
| Date accepted online: | 25/09/2006 |
| Published in print: | Volume 65, Issue 2, Pages 110-124 |
Book Reviews
Whilst New Public Management (NPM) may no longer be literally 'new', its evolution continues to throw up fresh issues. Managerialism, a central feature NPM, is closely related to the more recent concern with governance which itself has raised particular problems. Managerialism is often accompanied by the creation of formal contractual relationships between state instrumentalities and other entities for the provision of public goods and services. The entities may be public, private-for-profit or non-profit.
The success of provision under NPM contractual models therefore frequently relies on the performance of contracted entities. Those entities generally have a governing board. The crucial influence of boards on organisational performance, whether in exemplary results, maintaining steady-as-she-goes outputs or precipitating collapse, is oft reported. Whilst some collapses and scandals can be attributed to managers, boards generally bear ultimate responsibility. Boards' most basic functions include appointment of managers but they must also exercise overall responsibility for the entity, whether operating under specific or general statutory provisions. The exercise of these functions is termed corporate governance or simply 'governance'.
The scale of the more spectacular failures of corporate governance and its consequences for national economies and superannuation investments attracts great public notoriety, close attention by government and strong research interest. The governance of public and non-profit entities has received less scrutiny.
Cornforth's recent edited work,
The introductory chapter include a valuable review of theories of the role of the board and its relationships with owners (e.g. shareholder(s), which may be government), managers and stakeholders. The weaknesses of each theory are canvassed and a case mounted for a multi-theoretical approach which embraces the paradoxes and tensions characteristic of many organisations. It also sets the scene with an insightful discussion of the tensions between the relationships that board members can have with citizen-clients, stakeholders, managers and highly specialised professionals and concerning board involvement in different levels of management.
The summary of the complex network of bodies who 'run' the public sector in the North East of England gives a good picture of the number and range of boards involved (Ch 2). It concentrates of democratic issues and concludes with worrying findings about the composition of boards and their relationships to the constituencies they serve. It does assume knowledge that the area is the eastern half of England (including Newcastle-on-Tyne) south of Scotland to Yorkshire.
An examination of the tensions between effectiveness, accountability and legitimacy resting on stakeholder representation leads to factors found to have significant beneficial impacts (Ch 3). This is followed by valuable findings on effective forms of user involvement in service delivery, based on research with charities.
Part II makes important findings of key factors that can severely limit the effectiveness of boards' roles in strategy (Ch 4), a wide range of practices and behaviour amongst boards in meeting financial management and reporting requirements, especially where the latter are prescriptive (Ch 5), and the revealed effects of organisational size on board behaviour (Ch 6). These findings should sound salutary warnings to those expecting that the imposition of regulatory or contractual conditions will necessarily lead to high levels of compliance with the desired behaviours.
Part III reports that the relationships between board chairs and senior managers were not highly dissimilar between sectors, except that chairs of voluntary organisations were less interventionist. Whether this is due to close working relationships, with its implications for accountability, is unresolved (Ch 7). The CEOs perceptions of relationships with their boards also revealed a very mixed picture, suggesting these relationships vary greatly according to legitimate contextual factors (Ch 8). This is highlighted in the case of independent museums, where boards defer to highly specialised advice that is crucial to credibility in their markets (Ch 9).
Part IV documents some unsurprising findings on the charitable organisation size to board size relationship (Ch 10). Serious unresolved issues affecting National Health Service regional boards, but with wider relevance, are reported in Ch 11. The capacity of governance of non-profit (women's) organisations to adapt is described in Ch 12. Cornforth concludes with an excellent overview of issues affecting the governance of boards (Ch 13).
This book is an important addition to the literature that will be valuable to scholars and practitioners far beyond its English origins. A useful by-product is an overview of the contemporary structure of the delivery of public goods and services in England.