Best practices are encouraging increased accountability in every industry and entity that has a board of directors, including government boards. Transforming governance for a government board brings many nuances and challenges with it. The issues that government boards face are complex and large, and greatly impact the jurisdiction and the people who live in it. The tax-paying public is a tough audience. Judgment about how facets of government run is usually loud and rampant.
Perhaps the most challenging thing about transforming governance on a government board is that many things have to change at the same time. Even small changes in governance signal changes in people, processes, technology, physical infrastructure and the law simultaneously.
Some state and federal governments have established programs of their own to overcome some of the challenges that hold back progress. Two such examples include the Office of Business Transformation within the Department of Defense and the Transformation Office in the Department of Homeland Security Citizenship and Immigration Services.
The public expects government boards to run effectively and efficiently, and with the utmost fairness and professionalism.
Transforming Governance Is Moving Slowly on Government Boards
The focus on transforming governance is beginning to highlight some of the weaknesses in government performance. In a presentation by the Government Accountability Office (GAO) at The Coast Guard Innovation Expo in New Orleans in 2007, a report called 21st Century Transformation Challenges outlined some of the reasons that governance transformation lags in government bodies, noting that accepting the status quo is simply unacceptable.
The presentation cites numerous challenges with respect to government performance and accountability. Governments acknowledge being plagued by negative past fiscal trends and having continual difficulty strategizing for the long term.
As if those issues aren’t challenging enough, citizens and advocates demand quick responses and demonstrable results.
Transforming governance has a fiscal impact and government boards are often restricted by budget allocations from the legislators. Many of the government frameworks, policies and practices are vastly outdated and need to change.
Additional Challenges in Transforming Governance in Government Boards
Discussions in government boards about transforming governance are likely to draw out diverse and oppositional viewpoints from stakeholders. Balancing all sides can be challenging for change-makers. Because government boards often include government officials, government representatives, advocates, citizens and others, results from transformation efforts could impact the jobs of those who work on the transformation process, causing them to be biased in their decisions.
Perhaps the greatest challenge for government boards is that current government processes must continue while transformation planning and implementation take place. Despite the obvious challenges of having two processes taking place simultaneously, staffing and budgeting get allocated to current processes. Transformative policies and practices may not have the benefit of necessary financial support.
The Composition of Government Boards Makes Transformation Challenging
Regulatory changes and changes in the marketplace are driving a heavier focus on transforming governance by placing pressure on boards of directors to appoint new board directors who have higher levels of skills and abilities. For most industries, one of the easiest changes to make in moving toward governance transformation is in board composition. Boards are feeling pressure to take an objective look at their boards and to make changes that account for diversity, ethnicity and independence. There’s also some pressure to cap the number of board directors so that boards can make better decisions faster.
The composition of government boards is often designed by statute. Changing the composition of government boards may require legislative changes. With many of the board directors on a government board being public officials or government representatives, government business can make it difficult to set dates for board meetings where attendance is full. Not having full board meetings on a regular basis makes it challenging for government boards to make timely decisions.
While the intent is for board work to be independent and free of groupthink, members of government boards may have ties to political influences and affiliates, limiting their voices on the board. In addition, government officials and employees have an obvious conflict of interest when it comes to voting on certain matters.
Transformation in Government Boards Requires Transparency and Accountability
Most government boards are subject to an Open Meetings Act. With the exception of executive sessions, government board business meetings are typically open to the public. Open meetings are an inherent challenge that sometimes inhibits board directors from rendering independent opinions and taking ownership of their claims.
Transformation in government boards should allow for all voices to be heard and documented. Boards can accomplish this by publishing dissenting views and encouraging and promoting ownership among program stakeholders.
In considering transformative changes, government boards also need to consider how changes impact support agencies and how to communicate changes to stakeholders.
Effect of Technological Transformation on Government Boards
For the most part, boards of directors realize how technology aids and enhances their work. Technological advances aid in effectiveness, efficiency and communications. Technology responds to the need for current data, documentation and a high level of security. As much as technology aids government board work, once again, budgeting issues limit boards’ ability to take advantage of it.
Governments need to weigh the benefits of technology against the budget as they pertain to making systems more secure, connecting frameworks across governmental bodies, and capturing and communicating important data. The end result of taking advantage of technological advances will result in greater efficiency, which will net greater trust from the public.
Demonstrating the need for improved technology to enhance governance will require data and advocacy on the part of government boards.
Additionally, government boards should be looking to work with the right technology provider to ensure that they are using technology that provides the right level of security and can improve their governance. At Diligent, we believe that technology can greatly improve governance. Board directors are obligated to perform a host of varied duties and responsibilities. Diligent developed a suite of governance tools to help them fulfill their responsibilities accurately and efficiently. The Governance Cloud ecosystem of products includes:
- Diligent Boards
- Director and officer questionnaires (pre-filled forms)
- Board evaluations
- Resolutions and voting
- Diligent Messenger
- Diligent Minutes
- Insights (curated content and videos) (beta)
- Entity Management
As board directors, leadership teams and general counsels continue to express their needs to digitize governance processes, Diligent will be the partner to grow with them. Collectively, these tools enable corporations to achieve a fully digitized and integrated governance ecosystem to mitigate risk, plan for strategic growth and ultimately, govern at the highest level.
Concluding Thoughts on Transforming Governance for Government Boards
Documentation is a key issue when transforming governance for government boards. The inherent challenges that government board directors face will certainly elongate the timeframe for governance transformation to take place. Clear documentation will set the stage for implementing plans in later phases when newcomers join the board to help keep the focus on the original design. In addition, documentation serves as a basis for government boards to make changes if conditions change or new information becomes available later on. Documentation is also helpful for dealing with oppositional stakeholders. Even if stakeholders continue to disagree, dissenters often gain acceptance of ideas when they understand how those decisions were made.